US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Rising Prices Are Another Reason for Out-of-Stocks at Grocery Retailers

Grocers are pushing back against food suppliers over rising prices.

Some grocers are refusing to stock goods if the food suppliers can't justify their price increases, won't negotiate, or won't delay price increases...especially if they have a similar item (e.g., another brand, same product in a different package size, fresh v. frozen) that is selling well.

This is expected to have an effect on product assortment at your local grocery store. There will likely be fewer new products, more store brands, possibly fewer specialty items, and different cuts/types of meat, among other effects.

Even if the negotiations with food suppliers don’t result in lower prices, it's good press for the grocers to be able to tell their shoppers they are fighting for them.

On the other side of the coin, food suppliers know they have to watch out for customers who might find alternatives and start switching which products they buy. While they have to guard against loss of profit margins, it's expensive to win back a customer after they have developed new shopping habits.

Our expectation is that this trend is not limited to food and will also be happening – where it isn’t already – in other markets and industries hit harder by inflation. More companies are pushing back (where they have the power) and seeking alternatives.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the Consumer Goods markets, Packaging industries, and Automotive & Transport industries, as well as Food & Beverage coverage from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Custom Research      Food & Beverage    

Trouble For Ultrafast & On-Demand Delivery

In the past week, there has been a flurry of announcements of cut-backs, closures, and staff reductions from delivery firms, particularly the ultrafast, on-demand delivery service providers.

The home delivery industry more broadly has seen its share of innovations, developments, and growing pains… but what’s going on now?

  • A tight labor market and rising labor costs are making it hard for delivery companies of all stripes to find the workers they need at a cost that allows them to keep prices at a level consumers will accept.
  • Rising grocery costs are leading consumers to think twice about convenience spending for delivery services.
  • Supply chain troubles are making it harder for on-demand delivery firms to ensure that they will have what a customer needs when stocks are low and out-of-stocks are common.
  • More grocery stores have developed their own in-house delivery services, including Walmart’s in-home delivery option.
  • Curbside pickup operations have matured to function better and more seamlessly, with a greater number of pickup times run more efficiently to accommodate more customers with less waiting.
  • More consumers are willing to venture out and do their own grocery shopping as pandemic fatigue is rampant despite ongoing high infection rates.
  • Getting enough early state funding is problematic for some, particularly as a few on-demand service providers relied on investments from Russia.

Still, there are opportunities as better established delivery firms expand beyond an initial grocery or foodservice scope. The more broad use of predictable subscription orders will also add efficiencies. Technological improvements from electric vehicles to AI-assisted ordering and drone delivery (for small orders anyway) will allow for cost reductions and greater efficiencies in more areas.

The delivery industry will continue to innovate and Freedonia analysts will continue to watch trends for additional opportunities.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the Consumer Goods markets, Packaging industries, and Automotive & Transport industries, as well as Food & Beverage coverage from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Food & Beverage    

Inflation, the US Food Market, & Consumer Behavior

There are a lot of factors behind rising prices in food, including still high demand for cooking at home, rising cost to transport food, supply challenges as processors shut down temporarily or issue recalls, seasonal/climate/weather challenges to crops, and global shifts in supply due to crisis points such as the war in Ukraine and sanctions on Russia.

Many consumers are concerned about rising or otherwise inflated prices in several product categories, but concerns are highest for food. In the Freedonia Group National Online Consumer Survey conducted in October-November 2021, 56% of respondents reported being very concerned about rising food prices. In the November-December 2021 edition of the survey, 50% of consumers strongly agreed they were concerned about rising food prices. By the February 2022 survey, this figure had jumped to 60% of consumers.

Similarly, in the October-November 2021 survey, 49% of consumers reported they were very concerned about food shortages. In the November-December 2021 survey, 27% of consumers strongly agreed they were concerned about shortages of food they typically buy, and this figure grew to 39% in the February 2022 survey.

Shortages typically mean higher prices; low supply and/or high demand brings on higher prices. So, people who are concerned about shortages are also showing their concern for rising prices. Consumers who are expecting the things they buy (in this case food) to become less available and for prices to rise will stock up now, thus assuring themselves of enough stock locked in before prices increase even more.

However, that is a self-fulfilling prophesy. As more consumers buy ahead of their need, that messes with supplies as manufacturers can’t keep up with demand, resulting in more shortages on shelves and driving prices up even more.

Freedonia analysts continue to watch inflationary trends for direct and indirect effects throughout the economy.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the Consumer Goods markets and Packaging industries, as well as Food & Beverage coverage from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Food & Beverage      Packaging    

Autonomous Farming?

A big area for M&A activity in the last few years is in artificial intelligence, sensors, and related hardware.

The example of John Deere’s push into technology is a telling one. The company has been making many acquisitions in this area and this month announced it was acquiring artificial intelligence start up Light.

This announcement reflects two important trends:

1) It shows a legacy company increasingly moving into AI/robotics – a trend toward innovation that is occurring across industries and should not be ignored.


2) The company Deere acquired (Light) started out making cameras for smart phones, but then became a major player in autonomous vehicles by making advanced cameras and sensors – an example of a company taking something that was pretty basic and seeing a lot of downward cost competition and creating its own market by taking what it can already do into new markets.

Freedonia analysts continue to watch trends in AI, robotics, and other automation efforts across industries for additional opportunities.  

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in Construction & Building Products, Consumer Goods markets, and Automotive & Transport industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


What Will It Take to Make Remote Workers OK With Returning to the Office?

Freedonia’s analyst, editorial, economist, custom research, and marketing teams assembled in person at the Cleveland, Ohio office this week along with new staff in business development and the content team from Simba Publishing, our sister published brand. We shared ideas, developed new plans, discussed the factors in play underlying changes in our economy, and shared how key trends impact activity across industries. Our space included open and spaced out meeting areas, open windows kept the air flowing, and we used technology to include those who were unable to join us in person.

What would it take to make workers comfortable in the office? Two factors jump out. Clean air and lower commuting costs:

  • Wellness factors have long ranked high for many workers. Is the facility clean? Are there hygiene measures in place? How is the air quality? These trends accelerated in the pandemic era as workers prioritized the use of air filtration, ventilation systems, humidifiers/dehumidifiers, and indoor plants as ways to keep workers healthy. More companies and commercial building owners upgraded their HVAC systems, often incorporating HEPA filtration or improved fresh air exchange capabilities.
  • Commuting costs have more recently become an issue. With gas prices rising to levels not seen in decades, workers wonder why they have to spend more money to get to work when they were able to do their work remotely without the cost and time of commuting. Some companies are organizing carpool groups among workers or hiring a company to provide free vanpooling for multiple workers from multiple central locations. Other companies are offering bonuses, sometimes in the form of gas cards, to workers who return to the office more often.

Either way, businesses will continue to use creative responses and investments in their workers to retain staff. The most successful businesses will make the measures they incorporate meaningful to their particular staffs. The health of the commercial real estate market and business districts around the world rely on getting this balance right.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the Construction & Building Products group and the Consumer Goods markets, particularly Indoor Air Quality Equipment. Freedonia Custom Research is also available for questions requiring tailored market intelligence.