Codie SanchezFounder @ Contrarian Thinking

Do you feel poor?

6 Jun 2024 · 0 min

Watch on YouTube

0:28

Short video (social-media style) by Codie Sanchez explaining why shoppers may feel poorer at grocery stores despite headline inflation falling. The speaker attributes the effect to 'permanent price adjustment'—firms raising prices during high-inflation periods but not reducing them when inflation subsides—so everyday item prices remain higher than pre-2020 levels.

This is why you feel poor when you go to the grocery store even though inflation is actually down. If you bought this and this in 2020, it's like 10 bucks. Now 15. Why so much? If inflation isn't up 50%, it's something called a permanent price adjustment. So even though inflation's come down, it doesn't mean that people who previously raised their prices are also going to decrease prices. In fact, they're probably going to keep them high. So the grocery store is going to continue to punish you even though inflation's gone down. So you're not going crazy, you're paying way more.