MarketWatch: More pain in store at the (grocery) cash register; Shoppers seek cheaper alternatives

[marmar]

More pain in store at the cash register
Commentary: Shoppers seeking out cheaper alternatives
By MarketWatch


NEW YORK (MarketWatch) -- Sticker shock at the grocery store isn't going away any time soon.

Kraft Foods Inc. on Monday joined the chorus of food and consumer goods companies that, struggling with soaring commodities costs, have in turn passed along price hikes to the consumer.

The Northfield, Ill.-based company, whose brands include Chips Ahoy cookies, Cheez Whiz, Maxwell House coffee and Planters nuts, posted about a 4% gain in quarterly profit and raised its forecast for the year. Price hikes helped to boost results, but market share was under pressure as these higher prices were not immediately matched by rivals.

"Near term, pricing will remain the primary driver of revenue growth, as input costs continue to escalate, and volume comparisons will remain difficult, Kraft Chief Financial Officer Tim McLevish said during a conference call with analysts.

So prices at the grocery store are rising and will continue to climb, but Kraft saw some strength as people saw its products as cheaper alternatives to their typical meals, making Kraft's higher prices at the cash register the lesser of two evils.

For example, Kraft Chief Executive Irene Rosenberg pointed out that the company's Oscar Mayer Deli Fresh Cold Cuts "remain on fire, positioned against more expensive deli-counter meats," and the Oscar Mayer Deli Creation Sandwiches "represent a significant value, compared with takeout sandwiches."

Volumes have also picked up in pizza for Kraft, which sells DiGiorno and California Pizza Kitchen brands, as the company has "reframed" its products against pizzeria offerings.

People have also been trading down from soft drinks to cheaper powdered Kool-Aid and Country Time beverages, spelling renewed growth for these high-margin products. ......(more)

The complete piece is at: http://www.marketwatch.com/news/story/more-pain-come-grocery-store/story.aspx?guid=%7B5123B9A6%2DD5E4%2D4D47%2DABA9%2DCD1F5B420367%7D

[Warpy]

1. Even Costco isn't immune

and my beloved dry mango just went up two bucks a package.