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Feb. 12, 2019 is a day that will live on in the annals of American industry. Because it's the day we finally learned - thanks to a repoert in the Wall Street Journal - that Jeff Bezos (and, presumably, his investors) tolerance for loss-making businesses does have its limits.
According to emails obtained by the paper, Amazon-owned Whole Foods Market raised prices this month on dozens of items ranging from Dr. Bronner’s soaps to Häagen-Dazs ice cream. These prices hikes followed increases on another 55 items, including crackers, olives and cookies, according to an email from December. The reason for the price hikes? As we have previously reported, Clorox, Coca-Cola and Mondelez are just a few of the producers of consumer products, snack foods and beverages who were preparing to raise prices. According to figures cited by WSJ, nearly half of 52 consumer-goods manufacturers surveyed recently by consulting firm Acosta raised prices last year.
Hikes - Time - Consumers - % - Inflation
The hikes, we argued at the time, would blindside consumers who have grown accustomed to sub-2% inflation in a world where the Phillips Curve has broken down. And apparently, after the expiration of contracts that locked in low prices, Amazon isn't immune to these pressures.
Whole Foods said in the December email that suppliers were charging more for those products due to inflation. The separate price increases this month followed the expiration of annual contracts to sell about 700 goods at low prices, Whole Foods said. Those contracts won’t be renewed, the chain said, and the increases add up to hundreds of thousands of dollars a week in additional revenue.
Whole - Foods - Basket - Items - Stores
At Whole Foods, a basket of 40 select items purchased from their stores cost $191 last month, according to the Telsey Advisory Group, up more than 3% from what the same basket of goods cost last fall.
And if Amazon's WFM...
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