Tag: Deflation

Kroger And Walmart Try More Gimmicks To Thwart Amazon; They Will Fail…Again

Jon

Over the summer, we argued that the grocery business in the U. S. is, and always has been, a fairly miserable one. From A&P to Grand Union, Dahl’s, etc., bankruptcy courts have been littered with the industry’s failures for decades.
The reason for the persistent failures is fairly simple…razor-thin operating margins that hover around 1-3% leave the entire industry completely incapable of absorbing even the slightest financial shock from things like increasing competition and food deflation.
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Meanwhile, if these retailers have difficultly absorbing even the slightest changes in competition and food inflation, you can only imagine how the efforts of Amazon to slash in-store employee headcounts, a line item which Kroger spends roughly 17% of their revenue on, might impact the fragile industry. Unfortunately, at least for the traditional grocers of the world, a completely automated shopping experience may be closer than they had hoped just a couple of years ago.

This post was published at Zero Hedge on Dec 18, 2017.

UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall

Jon

UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall
– UK inflation hits 3.1%, highest in nearly six years
– UK earnings flat – households are still suffering falling real wages
– Stagflation risk as food and drink prices jumped 4.1% in 12 months
– UK house prices fall two-months in a row, down 0.5% in October
– Real stagflation risk now, inflation high and growth slowing
– Savings continue to be eaten by inflation
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It was just two years ago that Mark Carney was writing his fourth letter to the British Chancellor, explaining why the country was in a deflationary slump. Even then households were feeling the pinch, despite what officials reported.
Since then Brits have become increasingly vindicated as inflation figures have begun to show what they have all known for some time – prices and the cost of living is on the rise.
Now Mark Carney is forced to write a different type of letter to the Chancellor, one where he will have to explain why inflation is above target at 3.1%. The jump to over 3% in the year to November is the fastest paced increase seen in nearly six years.

This post was published at Gold Core on December 13, 2017.