Why Consumer Prices Keep Rising

Summary

---

WSJ Your Money Briefing

Episode Summary: Why Consumer Prices Keep Rising

Date: May 12, 2021
Host: J.R. Whalen
Guest: Jaewon Kang, Food Retail Reporter for The Wall Street Journal

---

Episode Overview

This episode dives into the significant and widespread increases in consumer prices across the U.S., particularly in food and household goods. Host J.R. Whalen interviews WSJ reporter Jaewon Kang to analyze what’s driving rising prices, how consumers are responding, and what to expect in the near future regarding inflation.

---

Key Discussion Points & Insights

1. Where Are Prices Rising Most?

[02:13]

• Broad Range of Affected Goods:
  • Food items: apples, berries, some meats
  • Packaged foods: Pending price hikes announced
  • Restaurant items: Increased menu and delivery prices
  • Household products: Diapers, foil wrap, appliances, garden and lawn supplies
• Distributors’ Announcements:
  • Some food and consumer product makers are planning price increases up to 10%.
  • Retailers must decide how much of these increases to pass on to consumers.

Quote:

“We’re seeing it in a wide range of consumer products … and some of the distributors have also said food and consumer product makers are planning to raise prices by up to 10%.” – Jaewon Kang [02:13]

---

2. Causes Behind the Price Rises

[03:18]

• Commodity Prices:
  • Commodities like resin (used for to-go containers and coolers) have risen, partly due to the Texas winter storm.
  • Other rising commodities: corn, lumber – also impacting packaging costs.
• Transportation and Freight Costs:
  • Shortage of drivers means companies must pay more for transportation, further increasing prices along the supply chain.

Quote:

“Prices are going up for a couple of reasons, one being prices for commodities… and we’re seeing those items go up in price. At the same time, a number of other ingredients like corn and lumber have been going up as well.” – Jaewon Kang [03:18]

---

3. How Consumers are Adapting

[04:23]

• Shifting Buying Habits:
  • Switching from name brands to store brands, especially on staples (e.g., detergent)
  • Trying to save on fuel by using rewards programs or driving less
  • Opting for frozen over fresh foods for cost and longevity
• Financial Squeeze:
  • Stimulus money largely spent, unemployment rates slightly increasing
  • Consumers reevaluating what to splurge on vs. save
• Selective Splurging:
  • Some willing to splurge on dining out after saving during the pandemic

Quote:

“Consumers are definitely noticing the increase in prices, and they’re switching to store brands from name brands on staples like detergent ... there are things that consumers are willing to splurge a bit on, like dining out, because they haven’t been doing that all of the past year.” – Jaewon Kang [04:23]

---

4. The Inflation Outlook

[05:50]

• Short-Term Spike Expected:
  • Economists predict a continued inflation rise, but disagree if it will be temporary or long-lasting.
• Retailers’ Challenges:
  • Navigating what consumers want (cheaper vs. premium)
  • Watching how consumer behaviors shift as prices rise further

Quote:

“Prices will continue to rise in a wide range of products that people buy every day ... Shoppers are trying to go for cheaper options when they can. And just, you know, navigating through that balance will be really interesting to watch.” – Jaewon Kang [05:50]

---

Notable Quotes & Memorable Moments

• “So on the food side, we’re seeing prices go up for produce like apples and berries and some meat. Packaged food makers have said price increases are coming, and restaurant operators too are raising prices for delivery and menu items.” – Jaewon Kang [02:13]

• “They, you know, people who received stimulus checks in the spring have likely spent through most of that money … and unemployment rate is also slightly going up. And, you know, people have to make decisions on what they’re willing to spend and what they’re willing to, you know, save on.” – Jaewon Kang [04:23]

---

Important Timestamps

• 00:35: Show introduction and topic – prices rising at grocery stores and restaurants
• 02:13: Most significant price increases explained
• 03:18: Commodity and shipping cost drivers described
• 04:23: How consumers are coping with rising prices
• 05:50: Short- and long-term outlook for inflation and consumer prices

---

Tone and Language

The discussion is concise, practical, and grounded in real consumer experiences. Jaewon Kang provides clear examples and data, while host J.R. Whalen keeps questions focused and accessible. The language is straightforward and free of jargon, aimed at helping everyday consumers understand what’s happening and what to expect next.

---

Transcript

[A]

Still running global payroll like a relay race. Deal replaces fragmented payroll vendors with one global system. No third parties hire, manage and pay teams in 150 plus countries with in house local experts and white glove delivery and deal plugs into what you already use. Workday SAP Netsuite operate like a local everywhere. Visit d e l.com WSJ that's d e e l.com WSJ.

[B]

Here's your money briefing for Wednesday, May 12th. I'm J.R. whalen for the Wall Street Journal. If you've been to the grocery store or restaurant lately, you felt the pinch Prices are going up.

[C]

The price increases are coming at a tough time for consumers. They you know, people who received stimulus checks in the spring have likely spent through most of that money.

[B]

So why are prices rising so sharply and how are consumers dealing with them? Well, ask our food retail reporter Jaewon Kong after the break.

[A]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data, they want your identity, they want your innovation. ReliaQuest fortifies your business with agentic defense AI that detects, contains and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest.com that's R E L I A Q U E-S-T.com.

[B]

The prices for various consumer goods have risen a lot from a year ago, some by double digit percentages, and that's leaving many shoppers feeling sticker shock. But are these sharp increases expected to continue? Our reporter, Jaewon Kong has been tracking prices and talking to manufacturers, and she's here with us to discuss. Jaewon, thanks for being here.

[C]

Sure, thanks for having me.

[B]

So Jaewon, it's been hard not to notice rising prices, but you've been tracking this closely. Where are we seeing prices coming up the most?

[C]

Sure, so we're seeing it in a wide range of consumer products. So on the food side, we're seeing prices go up for produce like apples and berries and some meat. Packaged food makers have said price increases are coming, and restaurant operators too are raising prices for delivery and menu items. And other companies have said they will be raising prices for household products like diapers, foil wrap, home appliances, and also garden and lawn products. And some of the distributors have also said food and consumer product makers are planning to raise prices by up to 10%. So that does not mean consumers are going to experience that exact same percentage. But it puts some pressure on retailers to decide how much of it they want to pass down to consumers and how much they want to absorb.

[B]

So I guess one of the big questions is, why are prices going up? What's behind this?

[C]

Prices are going up for a couple of reasons, one being prices for commodities that get used a lot as base ingredients. So, you know, things like resin, and that's been going up since the winter storm in Texas. And it gets used a lot in things like to go containers that restaurants use, coolers that a lot of companies use. And, you know, we're seeing those items go up in price. And at the same time, a number of other ingredients like corn and lumber have all been going up as well. And some of that is also increasing prices for packaging. Then we also have transportation and freight costs, which are going up as well, partly because companies are running low on drivers and they're having to pay up for people who are willing to do that work. And these factors are all trickling down the entire supply chain and are driving up prices for consumers.

[B]

And on the receiving end of all of this is the consumer. How are they dealing with this? It's got to be putting a squeeze on people's finances.

[C]

So consumers are definitely noticing the increase in prices, and they're switching to store brands from name brands on staples like detergent. And they're also trying to save up on fuel by signing up for rewards programs or, you know, just trying not to drive as frequently. And others are, you know, switching to buying frozen food rather than fresh because it's just cheaper and it lasts longer. The price increases are coming at a tough time for consumers. They, you know, people who received stimulus checks in the spring have likely spent through most of that money, and unemployment rate is also slightly going up. And, you know, people have to make decisions on what they're willing to spend and what they're willing to, you know, save on. But at the same time, there are things that consumers are willing to splurge a bit on, like dining out, because they haven't been doing that all of the past year. And some people have saved up during the pandemic from staying indoors and, you know, not traveling and such, so they feel like they have more money to spend on some items.

[B]

Now, a lot of economists are expecting a considerable jump in the inflation rate in the near term, but there's some disagreement over whether that'll be temporary or something that'll stick with us for a while. And based on your reporting, what does the future look like for consumer prices.

[C]

Yeah. So prices will continue to rise in, you know, in the, in the wide range of products that people buy every day, whether it's food or other household items. And retailers, the companies that sell these products will be figuring out what consumers want and where they're spending money because there are people who have been able to save more during the pandemic for various reasons and are willing to make splurges on some items. But at the same time, shoppers are trying to go for cheaper options when they can. And just, you know, navigating through that balance will be really interesting to watch.

[B]

All right. That's Wall Street Journal reporter Jaewon Kong. Jaewon, thanks for coming on the show.

[C]

Thank you.

[B]

And that's your money briefing. I'm J.R. whelan for the Wall Street Journal.

[A]

Deal replaces fragmented payroll vendors with one global system. No third parties. Hire, manage and pay teams in 150 plus countries. Operate like a local everywhere. Visit d eel.com WSJ.