Practical Dad

PracticalDad Price Index - November 2014:  Hot Dog(s)!

I'll keep this brief since I'm now sandwiched and involved in a home project which promises to morph into something much larger.  The November 2014 PracticalDad Price Index was completed and the results show that the Total Index for the 47 item marketbasket rose slightly to 111.15 (November 2010 = 100) from October's 111.11.  Despite the fact that beef and dairy prices have been rising significantly in the past several months because of the impact of the drought in the western US, the Food-Only Index for the 37 foodstuff items in the basket actually dropped from October's 114.45 (November 2010 = 100) to November's 113.87, a drop of more than a half point (.58 to be specific).

There's no doubt that the meat and dairy prices will continue to increase, although those prices were static over the course of the month.  The drop however, occurred because of a significant price decline in the price of one store's package of hot dogs.  It's fascinating to watch since this particular grocer actually engaged in stealth inflation with their hot dog packaging, decreasing the size of the package from 16 to 15 ounces during the summer; their price for hot dogs was substantially higher than their competitors so they decreased the package size to make it more competitive.  But within a four month period, they managed to drop the price by 28% and I can only assume that it was because they managed to find a producer capable of offering much lower cost dogs, which is essentially stealth deflation as prices are controlled not by altering the physical package size but rather, the quality of the input foods.  So one grocer has managed to engage in both stealth inflation and stealth deflation within a five month period.

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