Why don’t food prices fall as cost of fuel plummets?
I am the first to admit that I am not an expert on economics. Having said that, I do have a question for the major grocery chains.
It was stated through various forms of media that due to ever-rising fuel costs, consumers’ grocery bills would definitely be going up. Fair enough – transportation costs skyrocketed, and most of that cost was passed on to the shopper.
Fast forward two years or so. Fuel costs have taken a steep downward turn, and yet prices on the shelves have remained pretty much the same. So the question begs to be asked: Why haven’t food prices dropped on the shelves and in the coolers?
If it’s the correct business move to raise prices when the cost of fuel is high, isn’t it a good business move to lower prices accordingly when overhead costs drop? One would think by lowering prices, people would shop more and also stock up on certain items.
Supermarkets have loyal shoppers; maybe lowering prices would keep them loyal.
Don Sobocinski Jr.