Latest News by Industry
• Grocery costs have risen substantially, eating away portions from Americans’ monthly budget
• The Russian attack on Ukraine pushed gas prices to a record high in the U.S. and strained the global food systems
Groceries delivery app InstaCart Inc chief Fidji Simo said she is “worried” about the surging inflation in the U.S., which is taking a bigger bite out of consumers’ food bills.
“We have seen inflation definitely hit on Instacart,” Simo told Bloomberg on Wednesday. “The model on Instacart is that the grocer sets the price. And so, we reflect that price back to the customer.”
ALSO READ: Fed approves first interest rate hike in 3 years, six more to follow in 2022
A study from market research firm YipitData shows customer fees, excluding discounts, jumped 24% in January compared to a year earlier, most of which comes from service fees, that covers a broad range of operating costs, including shopper operations, insurance, background checks, and customer support.”
Service fees were 45% higher than 2021 and 61% more than in 2019.
Ordering essential items
The market instability due to Russia’s invasion of Ukraine helped push gas prices to a record high in the U.S. and strained the global food systems.
Experts are anticipating the war could raise costs even more.
ALSO READ: U.S. added 678,000 jobs in February, unemployment rate slides to 3.8%
“We are in a period of complete instability, and so anything that kind of disrupts these supply chains can have a direct impact on both prices and availability,” Simo told Bloomberg.
The CEO of the largest online grocery delivery platform in the U.S. also said customers are adapting by adjusting their order baskets and focusing on essential items.
Inflation data
Last week, the Labour Department said the U.S. consumer price gains jumped the worse in February to a 40-year high bolstered by rising gas and food prices, with prices expected to increase even further following the Russia-Ukraine crisis.
The consumer price index (CPI), which measures the costs of wide-ranging goods and services, increased 7.9% annually.
Energy prices rose 3.5% in February and accounting for about one-third of the headline gain. Food at home prices jumped 1.4%, the fastest monthly gains since early the COVID-19 days in April 2020. Food prices alone jumped 1%.
Picture Credit: Business Insider