- Author: Mark Bolda
The quarterly reports this last week of two of America's best big box retailers, Walmart and Target, rocked the stock market not only for their disappointing results but also for the dim view they described of the retail environment in general. There is here a clear indication of a big shift downward in consumer spending all the while the producer and seller input costs remain stubbornly elevated.
The prospects of these gigantic and incredibly well-run retailers are not only a useful bellwether on what is happening in the American economy, but also their description of the retail environment gives us a sense of what to expect in costs and returns for our berries right now and the year to come.
According to what was shared, it looks like the days of strong prices thanks to lean inventories and a nation awash in stimulus cash are coming to an end. Target said that it is so far holding the line on prices at the same time it sees costs of fuel and freight going up a billion dollars this year, and Walmart, although unlike Target able to pass along price rises to its customers, is still taking a serious hit to profits from higher costs on inputs like products, supplies and labor.
Bottom line out of this is that it's not going to get any easier for sellers for a while. Input costs to produce things will remain high, all the while customers are becoming more balky about accepting rising prices and trading down to cheaper if not outright refusing to buy stuff they feel is too expensive. Extrapolate what you will on demand our premium fresh berries.