As 2025 approaches, U.S. consumers are eagerly awaiting the opportunities that the new year will bring. Retailers, large companies and customers alike are looking forward to the political and economic changes that a new presidential administration could bring. However, in this framework there may be some brands that are not having a good time, as is the case of Walmart, which had to increase a daily product and received thousands of criticisms.
The PCE price index and Federal Reserve policies
The latest PCE Price Index, released in December, showed a continued increase in prices at an annual rate during November. Some analysts suggest that this would have a negative impact on the Federal Reserve. The Fed could pause in its interest rate cutting strategy. According to the report, the consumer price index rose 0.3% in November. And the most relevant increases occurred in the following sectors:
- Meals at home: increase of 0.4%.
- Meals away from home: increase of 0.5%.
- Energy: up 0.2%.
- New automobiles: increase of 0.6%.
- Used cars: up 2.0%.
- Clothing: increase of 0.2
- Health services: 0.4 percent increase.
- Housing: increase of 0.3
Increase in food prices
Supermarket food prices also recorded an increase in the month of November. The Bureau of Labor Statistics highlighted the following movements:
- The index for meat, fish, poultry and eggs rose 1.7%.
- The beef index rose 3.1%.
- The egg index was up 8.2%.
- Non-alcoholic beverages were up 1.5%.
The egg market crisis and its impact on Walmart
Egg prices have risen sharply due to an outbreak of avian flu. This affected the production of these foods and sent wholesale prices soaring 55% in November. In addition, their production was reduced by 4%, generating a direct impact on the consumer.
In California, the Department of Agriculture raised the target price for large eggs to $8.97 per dozen, an increase of 9.5%. Walmart has been one of the hardest hit retailers, especially at its Chico store, where a carton of 18 eggs rose to $9.52, when it was previously offered at $7.22.
Consequences of these increases
Discussion about prices on Walmart’s subreddit revealed that there was a 140% increase in eggs during 2024. Users expressed surprise and concern about the costs. Many with angry words, while others simply expressed outrage at the overall situation.
Walmart President and CEO Doug McMillon addressed the issue and expressed his displeasure at the high inflation by the end of 2024. In doing so, he tried to urge investors to temper their optimism heading into 2025. Despite this complicated scenario, McMillon expressed confidence that some of Walmart’s products could be adjusted throughout the year and return to prices that suit the public, who are having the hardest time with this economic context.
The economic situation in the United States remains uncertain. However, there are expectations that government policies and market changes may stabilize prices in the coming months. Although to know this, it is necessary to see the decisions that will be implemented by the new presidential administration that will be in the hands of Donald Trump, elected president in last year’s elections.
