Will the Prices Come Down?
December 5, 2008 by Karen Weideman
Filed under financial matters, food
I mentioned earlier this week that the price of gasoline has finally dropped below $1.80/gallon and it continues to fall.
When gas prices increased, we saw prices on everything skyrocket. One of the things that affected us most was the price of food.
Now that the price of fuel is going down, do you think we’ll see a price deduction at the stores or do you think the food industry will continue to keep the prices high?
While I’d like to say yes, something tells me these won’t be dropping. But I’m wishing.
Prices will stay high and likely go higher.
With the collapse of the economy it came to light that the majority of companies are now operating on a credit basis.
Rather than buying more product from their profits – as previous generations of business owners have – they have been relying on credit to stock shelves, pay trucking companies to ship goods, meet payroll and benefits commitments.
Well when the whole country goes on a credit spree and then can’t pay the minimum payments anymore then credit stops circulating. Enter economic crash.
The boom or bubble if you will – was a credit illusion.
Stores will have to charge more for food now because neither Wall Street or Main Street is offering up credit quite so liberally. Some truckers are beginning to refuse to move goods without cash payments – some suppliers too. Stores don’t have cash. It’s a problem that will drive prices higher.
When they start lending money again – the question is – is it really in our true economy’s best interest to build the world economy on credit instead of actual money?
That said, there will be a period where luxury retail stores and auto makers will attempt to drastically reduce prices to try to keep any cash flow going. I’m thinking it would be a pretty good time to finance a car and get a fantastic deal on stuff you want to stock up on.
Chicken prices, probably all meats, are going to skyrocket – just a warning – fill the deep freeze now to shelter your family.
I don’t think it will. Once retailers get you used to new regular price, I can count on one finger the amount of times I have seen them drop their regular prices.
I think that depends on the item.
Drugs – when they are first released are quite expensive. But, the prices drop every year. Then generics are made and the prices plummet.
Electronics – I figure I’ll be able to easily afford an iPhone and a Wii in two more Christmases. Because the prices of electronics drop dramatically every year they are already out.
In fact, prices come down on clothing so often that I can literally count the weeks between the time I see something I want and the time I will find it on the clearance rack and I can afford it.
I literally bought 3 brand new pairs of shoes for a total of $2.50 – retail market price about 6 months ago was over $100.
It’s items like milk, bread, coffee, meat that will stay high.
I’ve already seen some things come down. Milk being one of them. 3 months ago, it was close to $7.00 for a gallon of organic milk, now it’s under $5.00. While it may still be higher than what it once was, that is a substantial savings in the long run.
There will always be an ebb and flow to prices, and as long as we, the consumer, continue to pay the prices they will continue to rise.
I’m sure food prices will stay high. I just heard on the news that a lot of the food is having problems from California. This will affect everyone’s prices around the US. Sigh… At least gas is low again.
I’d have to agree with Kristen. Sadly, that’s the way it has been ever since I can remember.
Some analysts are saying gas prices will stay low as long as the economy is struggling, but then I also heard oil-producing countries wanted to cut back on production to drive up costs. It’s anybody’s guess, but $1.50 (in the southeast) sure is nice while it lasts!