Ingram's April 2023

REFLECTIONS

by Dennis Boone

At the Intersection of Business and Life

When Prices Go Up, Dial Demand Down

Don’t complain about the cost of goods if you’re part of the reason they’re exploding. Last summer, at the peak of the inflationary spike—and, as it happens, the peak of the soda-consumption cycle—I spotted a fellow chuch parishioner in the aisle of the local grocery store. The careful shopper was assessing soda prices and doing the mental math on consumption for a household with four kids. Ever one to seek out the lighter moment amid someone else’s personal agony, I asked: “Don’t you need to see a mortgage officer before buying soda?” “No kidding,” the perturbed parent said. “Not sure we can keep up with this.” Mind you, this individual represented one-half of a true power couple in Kansas City professional services, each being in the senior office leadership of a significant organization. Ballpark? I’m guessing combined pretax household income north of $500,000. When someone in that tax bracket is feeling the slings and arrows of outrageous pricing, you know the economy has entered strange new territory. My answer—with multiple teen-agers at home—is a bit simpler: The hell with it. I ain’t buying at those prices. I’ll load

Not mine. I’ll make the time if it means sticking it to the over-chargers. I’ve eaten my last fast-food hamburger at $7. Just not worth it to me. Same with the striped buckets of chicken. This month, I saw the signboard out front advertising a 12-piece family meal— for $36. Why would anyone do that when you can buy seven whole chickens for less than that, fresh off the rotisserie, at the grocery warehouse up the hill? Coffee? No, thanks—I’m an iced tea guy at 20 cents a gallon. And one of the best investments I ever made was a chest freezer with enough capacity to accommodate a side of beef. Fed a family of four for close to a year at (then) $2.75 a pound. There is, then, a solution for the Soda-Challenged out there: Stop buying. Make the bottling companies swim in that stuff. Don’t lay out a dime until they cry, “Uncle!” Of course, this won’t work quite as well with the gas you need to get to work or to heat the house, but there are plenty of examples of de- mand-driven price declines that should inspire hope. Check out the latest dev- elopments in the housing sector if you need hard evidence. What we really need in this country is an online dashboard that tracks production trends and forecasts price increases on every imaginable consumer good. As soon as the leading indicators flash red, buyers can respond accord ingly to reduce demand: Produce it on our terms, or eat it yourselves. That may lack the cachet or the moral imperative of, say, a French Revolution. But it certainly would get their attention. Let them eat the over priced cake. Want to end inflation? Stop feeding the beast.

up when the sales hit, especially if the grocers make soda a loss leader that week. That strategy has worked for years, so long as I can keep space free in the garage to accommodate half a pallet at a time. (Caveat: This works fine until a Winter Storm Uri moves in and drops the garage temps to sub-zero.) The soda story came to mind recently when I reached into the cooler at the store for eggs, saw the price, uttered a mild expletive of surprise, and closed the door. Skip the eggs this week. Granola for breakfast, times seven.

What we really need in this country is a real time tool that allows consumers to see where prices are headed.

What can I say? I’m a cheapskate. The likely result of being raised by parents whose childhood was defined by the Great Depression. It’s a different value proposition than many Americans seem to have these days. One can’t engage in such personal reflections without leaving room for the possibility that we’re dealing with a case of Stage IV Geezerdom. Still, it seems our values and priorities are out of whack when someone complains about paying $12.29 for a couple of slices of avocado toast—a concoction I will never understand—or north of $5 for what Steve Martin once described as a “half-double-decaf-half-caf.” Or gourmet cookies at $3 each. Their chagrin is misplaced. After all, they have the income that allows them to make the choice. Not everyone does. The question I have is, do people so value their personal time today that making things fresh, at home, at a fraction of the cost, is no longer an option? Maybe so: Perhaps they’re out doing side gigs and weekend hustles, so their kitchen time is at a minimum.

Dennis Boone is the edito rial director at Ingram’s. E | DBoone @ Ingrams.com P | 816.268.6402

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I ngr am ’ s

Kansas City’s Business Media

April 2023