{"id":10645,"date":"2023-05-09T17:56:05","date_gmt":"2023-05-09T17:56:05","guid":{"rendered":"http:\/\/lonecandle.com\/?p=10645"},"modified":"2023-05-09T17:56:05","modified_gmt":"2023-05-09T17:56:05","slug":"the-real-reason-prices-arent-coming-down","status":"publish","type":"post","link":"https:\/\/lonecandle.com\/?p=10645","title":{"rendered":"The real reason prices aren\u2019t coming down"},"content":{"rendered":"\n

\n\n“The thing about excuseflation is it\u2019s sort of grounded in truth. It\u2019s the idea that companies are using these once-in-a-lifetime disruptions. Think about the supply chain hiccups that we\u2019ve had. Think about the Ukraine-Russia war. And they\u2019re using those one-off disruptions as an excuse to raise prices. And that sounds fair enough. You know, companies, they have expenses. If their input costs go up, maybe it makes sense for them to pass some of those on to customers. But where it starts to become insidious is when they\u2019re raising prices so much that they\u2019re seeing their profits go up quite substantially as well.”
…
“Sure. So one of my favorite examples, because, you know, I love these personally, but chicken wings. Let\u2019s talk about chicken wings and Wingstop. Wingstop is a very large purveyor of very delicious chicken wings. And what they\u2019ve been saying on their earnings calls is that they have been raising their prices for their delicious chicken wings. And the reason they\u2019ve been doing that is because the wholesale cost of your basic chicken wing went up quite a lot during the pandemic<\/a>. We had a lot of disruptions at various farms, chicken farms with labor shortages and things like that. So it made sense that chicken wing prices went up and the company started passing those on to consumers.
The issue now, though, is that we have seen a substantial drop in chicken wing prices. And yet the company isn\u2019t saying that it\u2019s going to start dropping its prices. What it\u2019s discovered, much like a lot of other businesses at the moment, is that actually this strategy of making up what you lose in sales volume with higher prices, so you\u2019re selling fewer products, but you\u2019re selling them at higher prices, [is] a viable strategy in the current environment, and it\u2019s working for a lot of companies because profit margins are up.”
…
“baker in Chicago kind of laid it out for us. He said: “Whether it\u2019s rye flour or bird flu, that impacts eggs when it makes national news just running a business, it\u2019s an opportunity to increase the prices without getting a whole bunch of complaining from the customers. It\u2019s not that we\u2019re out there price gouging, but, you know, timing can be everything.<\/em>“”
…
“think about the reason that we tend not to like monopolies as consumers. We want, you know, a vibrant landscape of lots of smaller businesses that are all competing with each other so that we get a better value for our money. What happens when you have an industry-wide event that gives a group of businesses an excuse to raise prices: They are all effectively, not officially, but effectively acting as a monopoly. They can all say, well, you know, it\u2019s bird flu, so we\u2019re all going to raise the prices of our eggs.”
https:\/\/www.vox.com\/podcasts\/23682466\/inflation-prices-us-economy<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

“The thing about excuseflation is it\u2019s sort of grounded in truth. It\u2019s the idea that companies are using these once-in-a-lifetime disruptions. Think about the supply chain hiccups that we\u2019ve had. Think about the Ukraine-Russia war. And they\u2019re using those one-off disruptions as an excuse to raise prices. And that sounds fair enough. You know, companies, they have expenses. If their input costs go up, maybe it makes sense for them to pass some of those on to customers. But where it starts to become insidious is when they\u2019re raising prices so much that they\u2019re seeing their profits go up quite substantially as well.”<\/p>\n

…<\/p>\n

“Sure. So one of my favorite examples, because, you know, I love these personally, but chicken wings. Let\u2019s talk about chicken wings and Wingstop. Wingstop is a very large purveyor of very delicious chicken wings. And what they\u2019ve been saying on their earnings calls is that they have been raising their prices for their delicious chicken wings. And the reason they\u2019ve been doing that is because the wholesale cost of your basic chicken wing went up quite a lot during the pandemic. We had a lot of disruptions at various farms, chicken farms with labor shortages and things like that. So it made sense that chicken wing prices went up and the company started passing those on to consumers.<\/p>\n

The issue now, though, is that we have seen a substantial drop in chicken wing prices. And yet the company isn\u2019t saying that it\u2019s going to start dropping its prices. What it\u2019s discovered, much like a lot of other businesses at the moment, is that actually this strategy of making up what you lose in sales volume with higher prices, so you\u2019re selling fewer products, but you\u2019re selling them at higher prices, [is] a viable strategy in the current environment, and it\u2019s working for a lot of companies because profit margins are up.”<\/p>\n

…<\/p>\n

“baker in Chicago kind of laid it out for us. He said: “Whether it\u2019s rye flour or bird flu, that impacts eggs when it makes national news just running a business, it\u2019s an opportunity to increase the prices without getting a whole bunch of complaining from the customers. It\u2019s not that we\u2019re out there price gouging, but, you know, timing can be everything.””<\/p>\n

…<\/p>\n

“think about the reason that we tend not to like monopolies as consumers. We want, you know, a vibrant landscape of lots of smaller businesses that are all competing with each other so that we get a better value for our money. What happens when you have an industry-wide event that gives a group of businesses an excuse to raise prices: They are all effectively, not officially, but effectively acting as a monopoly. They can all say, well, you know, it\u2019s bird flu, so we\u2019re all going to raise the prices of our eggs.”<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[1027,217,165,1316,1166,384,1407],"class_list":["post-10645","post","type-post","status-publish","format-standard","hentry","category-article-share","tag-chicken","tag-economics","tag-economy","tag-inflation","tag-monopoly","tag-price","tag-prices"],"_links":{"self":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10645","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10645"}],"version-history":[{"count":1,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10645\/revisions"}],"predecessor-version":[{"id":10646,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10645\/revisions\/10646"}],"wp:attachment":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}