Grocery bill still high? Blame "sticky" prices

[inanna]

Source: AP

Worries over a global recession have pushed the price of oil to its lowest in over a year. Don't expect the same for a bottle of beer, a tube of toothpaste, or a box of cereal.

You can blame "sticky" prices.

That's what analysts call it when companies slap higher prices on products and keep them there even though the rationale for the price hikes - such as soaring oil prices - is gone.

The falling cost of oil could help companies pad their profit margins as they pay less to make and transport goods. But it won't mean a break on the average grocery bill.

The price of consumer goods typically lags behind the price of key inputs like oil and wheat, said Chris Lafakis, an economist with Moody's economy.com.


Read more: http://hosted.ap.org/dynamic/stories/S/STICKY_PRICES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-10-19-14-36-50

[AndyTiedye]

1. Competition is Supposed to Bring Prices Down, But

with all the mergers and shutdowns, there isn't much of that anymore.

[napi21]

2. Atleast some of those higher prices are ligit. High transp. costs

were only partr of the problem. Severe storms, flooding, and even drought in sime areas have caused a dramatic increase in the cost of wheat, flour, and many other crops that have become scarce everywhere. Those shortages have also caused the price of animal feed to increase so it has affected the prices of all meats. I don't think anyone knows for sure if the severe weather patterns we've been experiencing across the clobe will continue or at least slow down a bit this coming year. Until that happens, grocery prices will continue to be high.

[Tandalayo_Scheisskopf]

4. Those commodity prices have come down as well.

Seems that the farmers under-reported the number of acres they planted, back in the spring.

No, this is largely profiteering. A last fling before things change in January.

[laconicsax]

3. But won't the increased profits and wealth trickle-down?

:shrug: