Grocery prices rising, but by how much?

The co-CEO of Whole Foods estimates price increases of 2% this year and as much as 4% next year. He still calls the situation 'manageable.'

By Kim Peterson Aug 15, 2012 4:33PM
The severe Midwest drought will take a toll on food prices for a long time. Your groceries are going to get more expensive, but by how much?

Walter Robb, the co-CEO of Whole Foods Market (WFM), said prices had actually been moving down before the drought hit. But now, as the nation's fields are getting destroyed by the heat, he sees prices rising 2% in the rest of 2012 and then 3% to 4% in 2013. His interview is in the following video.

Post continues below.
The drought isn't affecting Whole Foods' costs yet, Robb said. The company has good contracts in place now to insulate it from cost increases in the short term. But there's also a lag time of six to nine months between price increases at the farm and the impact at the consumer level.

"I think you're going to see a moving upward of inflation in 2013, although I think it's manageable at this point from everything I see," he told CNBC in an interview.

Whole Foods is still forging ahead with its expansion plans despite the food inflation. The company plans to open 28 to 32 new stores next year and 33 to 38 stores in 2014. "We're betting that demand for fresh, healthy foods is larger than this current economic cycle," he said.

The company said it's thriving and has created 7,000 jobs last year. It expects to create 8,000 jobs next year.

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Tags: WFM
36Comments
Aug 15, 2012 5:34PM
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Gotta love how the government doesn't include food in their inflation calculations.  They really ought to fix that.
Aug 15, 2012 5:59PM
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I don't need sex .. I get screwed by the government everyday !!!
Aug 15, 2012 6:47PM
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Nice, Yesterday you idiots (MSN) posted as a headline "Consumer prices may ease soon despite drought driven spike"... Meaning, grocery prices would be coming down. Now, not even 24 hours later, you flip flop and say now "expect prices to rise" Does everyone see the irony here? What a bunch of bee ess! I love how the elite sit around pulling everyone's strings like puppets, and how you guys report such propaganda garbage.
Aug 15, 2012 6:16PM
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Let's see.

Takes about 1 bushel of corn to produce 32 lbs of chicken or 1.75 lbs of corn per lb of chicken

If corn goes from $5 to $8 a bushel that means a price increase of corn goes from 9 cents a lb to 14 cents a lb ( 5 cent a lb increase in corn) for a NET price increase of about 9 cents a lb. for the chicken.

Wonder how that 9 cents a lb will be reflected a the grocery store.

You can count on three things.

First, the price gougers will be in full force.
Second, the media wil not analyze anything and blame the farmer.
Third, the AG organizations will never respond thus helping to screw corn producers even more
Aug 15, 2012 6:13PM
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With gas rising and groceries rising there will definitely be more crime and the people who are just managing to keep their heads above water are going to be sinking........I think the demand will go down for all the stuff, we can't afford anymore.........
Aug 15, 2012 6:35PM
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wtf is up with gas and grocery prices barry? you lefties blamed bush , now who are you gonna blame thats it is over a buck a gallon more, the mesiah?.been almost 4 years barry. i need cheaper fuel and grocery prices to get to work , feed my family and pay my taxes for the welfare mommies and their babies along with the illegals and their anchors.c'mon barry get your sheeit together.moral of the story...liberal media won't punish barry but was on the bandwagon to crucify bush even though both had or  have no control over fuel pricing. bush sucks as well as barry. one day maybe somewhere in a land far away we might have real leadership for this country.whoops! i just woke up... it'll never happen.
Aug 15, 2012 6:31PM
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We have a economic disaater for a President. A VP that doesn't know who's on first and a Dem Senate that could care less about you and I

Of course food prices will continue to go up and so wiil all other commodoties if we don't get those fools out of office

Aug 15, 2012 7:20PM
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"The drought isn't affecting Whole Foods' costs yet...".  That's because their prices are already so astronomical, they don't need to charge more in the wake of the drought!
Aug 15, 2012 6:14PM
Aug 15, 2012 6:37PM
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Say, Obama, are you going to blame Bush for this or try a new tactic and blame Romney?
Aug 15, 2012 8:09PM
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You have to be kidding. Everything has gone up like crazy and just continues to do the same. How in the hell is this "manageable" This country is absolutely falling apart before our eyes. We are $16,000,000,000,000.00 in debt. This in itself can never be paid off without printing money and that amount of newly printed money would make the dollar worthless. Do you realize that amount of dollar bills stacked would go to the moon and back. Thats over a half a million miles. Make no mistake about it. this country is going to collapse and there is nothing that can be done to stop it. Get ready!
Aug 15, 2012 6:11PM
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Nore722-- there is less to go around, so those most willing/most able to pay for it will be the most likely to get it.  There are already programs in place to assist the most vulnerable populations, and the rest of us "average Joes,"  well, we eat more spaghetti for a while, I guess...Price freezing will just mean that the first folks in line will bogart it all-- unless you bring back rationing.  Is that what you're suggesting?

 

And out of curiosity, what do you consider a luxury?  Many cultures (including our own) once considered meat a luxury.  Should we tax the meat we're price freezing?

Aug 15, 2012 6:01PM
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They need to put on a price freeze for everything. It worked years ago. Also a luxury tax on anything considered a luxury. It worked years ago. People now days are too money hungry  I.  dont mean the ordinary "Joe" like us.
Aug 15, 2012 8:00PM
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People will hunt in the off season, America is really spiraling downward..

Our Gov. is more worried about other countries than its own,people die every day because of our lame Governments.
Aug 15, 2012 7:09PM
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Drought is such a harsh word. We're precipitationally challenged.
Aug 15, 2012 8:53PM
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seems like theres always some excuse to keep raising prices...if its not gas its cigarettes..if not cigarettes its booze...if not booze its food...its either a hurricane or a oil spill or a drout or some **** got a hangnail...when is it ever going to stop...the working class can only afford so much...pretty soon the goverment will take our entire paycheck and give us a weekly allowance just like good old dad did when we were kids...bill gates keeps coming up with yet another versioon of windows..more money...he isn't rich enough yet...warren buffet controls most of the food industry...he isn't rich enough yet...walmart put mom and pop out of business...they aren't rich enough yet and it goes on and on...it disgusts me when I see tv propoganda about the poor hungry kids in africa and how only 35 cents a day will feed one...if 35 cents a day will care for a child over there why can't the same 35 cents care for a child over here who needs it just as much...the bible says clearly that charity begins at home...but not in this country...theres no charity here from our rich ones..they take care of each other at the cost of the working man's sweat and toil and keep raising the prices on everything...god forbid they should dig a little into their profits but its okay for us to dig into our piggy banks to keep them rich...ONLY IN AMERICA...!!!

Aug 15, 2012 8:20PM
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I would like to drop a few pounds but didn't think I would have to do it this way.
Aug 16, 2012 1:19AM
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Manageable? We are in the middle of a drought that some claim to be one of the worst since the Depression. And with 40% of our already drought diminished corn crop slated for ethanol production, how does this guy figure that there will only be a 2-4% increase in food costs?
Aug 15, 2012 7:05PM
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It's raining every single day here in NW Florida..
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