Is Australia Facing Inflation Problems Similar To US?
The cost of getting CE and appliances to market is rising with suppliers tipping price rises of between 10 and 20% this year due to shipping costs and increases costs of components this like the US will lead to inflation claim economists.
In the US inflation is now very noticeable as I have discovered during the past three weeks.
A large cup of Coffee is over A$10 and the price of goods in stores is rising rapidly.
Australian inflation has risen, but by a much smaller magnitude, up from 1.8 per cent to 3.0 per cent currently and less than double the ten-year average.
Economists claim that businesses in Australia need to prepare for higher inflation, but they do not expect inflation to accelerate rapidly – as we are seeing in the US.
Target’s US CEO Brian Cornell claimed at the weekend that U.S. consumers will drive less and consolidate their shopping into fewer trips as they adjust to increased petrol costs and the highest inflation rate in almost four decades.
In Australia retailers such as Aldi and Big W could see spike in shoppers as consumers hunt down cheaper prices and generic appliances and CE products claim observers.
If inflation does become an issue shoppers are likely to eat more at home and seek cheaper generic-brand goods in an effort to ease the blow from rising prices, Cornell said at a US National Retail Federation event in New York on Sunday Australian time.
Consumer prices jumped 7% last year in the USA and are rising steadily in Australia.
The US price rises was the fastest 12-month pace since mid-1982, according to Labor Department data released last week.
“Some of the historical ways consumers react to inflation will play out again in 2022,” Cornell said. “You’ll drive fewer miles; you’ll consolidate the number of times and locations where you shop. You’ll probably spend a little more eating at home versus your favourite restaurant, and you might make some trade-offs between a national brand and an own brand.”