Rising costs of living are no laughing matter in this tough economy. Inflation rates appear to be exponentially raising while salaries remain stagnant. How are people meant to cope amidst this harsh economic climate? With the new presidential administration, climate change, and shaky economies, citizens are standing on the doorstep of a rather uncertain future.
How steep are the increasing inflation rates at present?
There is no doubt that even bare essentials like food and other groceries are now seeming like luxury items. The proof of this can be plainly seen in the sheer volume of retail companies that had to close down multiple branches due to underperformance. The kicker is that all this is happening in 2025 and it is still only January.
Recently, in early January, the latest Consumer Price Index for December was released and the general trend does appear to be increases across key staples. The cost of services and key staples was up by 0.4% overall which puts the 12 month inflation rate at 2.9%. This rate is at the higher end of the forecast predicted by analysts. The report was predicted to come in at between 0.3% and 2.9%.
Below is an outline of the changes in core materials and services in December as compared with the previous month:
- Food: up 0.3%
- Energy: up 2.6%
- Gasoline: up 4.4%
- New cars: up 0.5%
- Used cars: up 1.2%
- Apparel: up 0.1%
- Shelter: up 0.3%
- Transportation: up 0.5%
- Medical care: up 0.2%
- Medical Care Commodities: 0.0%
Medical Care Commodities are the only measured good or service that remained stagnant from November 2024. Every other measure or service recorded an increase, some of which are notably high.
How are customers combatting this persistent struggle?
As one would expect, customers have to consistently create ways to cut costs and save money in any and all ways that they can. Presumably, to aid this, consumers are opting for budget-friendly retailers to fulfill their daily essential needs and it appears Walmart is the go-to choice for this.
It appears that the big box retailer gives you the best value for money when compared to its competitors. The company has boasted that it is seeing more interest and sales, particularly from a higher income cohort of customers seeking refuge from high prices at other grocery stores.
“We are seeing customers trade into Walmart, we’re seeing higher engagement across income cohorts, with upper-income households continuing to account for the majority of the share gains,” CFO John Rainey explained in a response to claims that shoppers who make $100,00 or more annually are showing preference for Walmart for its lower prices.
What are stores doing to aid their customers amidst rising inflation rates?
Budget retailers are broadening their inventory to give customers more options at a good price point.
Walmart has introduced an new line of in-house, quality food at a competitive price point called Bettergoods. This includes products like Pistachio Nut Butter, Oatmilk Non-Dairy Frozen Desserts, and Campfire Roasted Salsa.
In January, Dollar General DG has also announced the introduction of over 100 new in-house items that will mostly fall under its Clover Valley brand. Some of the new items include salad dressings, eight new flavors of ice cream, coffee syrups, and cinnamon rolls.
At present, Dollar General houses around 3,200 products under private label brands. Some of these brands include, Clover Valley, DG Health, TrueLiving, Smart & Simple, Heartland Farms, and Studio Selection.
These in-house or private labels are no small business and actually bring a large amount of value to the company. According to recent data by Circana, sales of private label brands increased by 4% to $271 billion in 2024. Brand name sales were up by just 1%, indicating shoppers are seeking cost saving opportunities over brand name.