Practical Dad

PracticalDad Price Index - July 2015

The pricing for the July 2015 edition of the PracticalDad Price Index was completed last week and this is one of those months where honestly, not much happens.  The Total Index (comprising the full marketbasket of 47 grocery store items priced at three separate and unrelated grocery stores) did drop from June's 107.11 to a new level of 106.30 while the Food-only Index (comprising the basket's 37 foodstuff items) rose however from June's 106.46 to July's 107.35.  So the question is, how can foodstuffs rise while the total index declines? 

In the past seven months, the grocers have taken multiple steps to lower their regular prices.  One chain implemented new regular store-brand pricing under a Low Everyday Prices banner while another took similar steps under an Everyday Low Prices banner; yep, you can't make this up.  Those two had decreased the regular, non-sale prices of a multitude of store-brand items and as the effects of these flowed through the Price Index, the independent grocer switched the supplier of its store brand items so that the lower prices on items were noted by the Index as well.  The result was notable as an almost ripple effect on the results as one change after another in the span of December 2015 through July 2015 affected the Index downwards in a deflationary manner.  The most recent effects are from the independent grocer as it continues to roll out new store-brand items; this occurs both as they become available and as the old inventory items from the previous supplier are exhausted and subsequently replaced by the new items so that any rollout can take months before it's completed.  In July's edition of the Index, the independent introduced the new supplier's version of plastic kitchen trash bags (13 gallon) at a price that was 29% lower than the old supplier's offering.  Couple this with some much smaller changes on non-foodstuff items and the effect is significant. 

Amongst the 37 item foodstuff components, what was notable was the effect of hot dogs.  In this case, one of the chain's store-brand hot dogs joined the other in a stealth-inflation increase as the packaging decreased from a full pound per eight hot dogs to 15 ounces and since I monitor that item by weight - one pound being the original standard - I adjusted the price upwards to reflect what it would be had it continued with the conventional 16 ounce packaging.  But unlike all of the other months however, the independent grocer's store-brand hot dogs simply disappeared from the case and it continued to be gone over the multiple visits that I made to that store to check on the hot dogs (and yes, it seems odd to walk into a grocery store, look in a case and just walk out again).  The independent's brand has been consistently less than the chain brand hot dogs and this absence meant that the average for the hot dogs is now significantly higher than before - hence the higher index level, all other things being equal.  My suspicion is that they're in the process of shifting that product - hot dogs - to the new supplier but that it simply wasn't available yet and I'll see that in the next month's edition.  To be honest, there has been a hot dog brand that cost less than even the independent's store-brand but I've not monitored that since the supposition from the outset of the Index was that I'd be following store-brands whenever they were available and before I deviate, I want to assure that this isn't a case of just awaiting a new supplier's product.  If that doesn't happen, then I will move to that lower-priced brand in lieu of the store-brand product.  What was fascinating in a massively geeky way was that the independent's case for hot dogs was missing multiple brands and much of the space had been given to larger packages of sausages in what appeared to be an attempt to keep it from looking completely barren.  We'll have to see how it appears next month.  And yes, the price of eggs increased due to diminished supply because of the Avian Influenza that's wiped out about a tenth of the nation's flock, also contributing to the higher level, but it was frankly less of an increase than I expected.

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