This past Wednesday night, I did a little grocery shopping. While I didn’t need much, I walked down every single aisle to kill time while the pharmacy filled my prescription. Not surprisingly, there were a number of empty shelves, with little discernible reason why X was out of stock but not Y. Come on, what do Cheetos and Vindaloo sauce have in common?
I also noticed something else.
This particular grocery almost always has people stocking the shelves; it doesn’t matter the time of day or the day itself. Ordinarily, a small army of folks are camped out on virtually every aisle making sure they groan with products to satisfy our gluttony and avarice. This was most definitely not the case the other night, as I didn’t see one dedicated shelf stocker in the entire store. The only person I saw who came close was a young woman who hummed a tune as she straightened out some quinoa packages.
Where were they all? The store employees with the produce, paper products, and the canned goods? The butcher putting fresh meat out? The Coca-Cola and Pepsi delivery folks who are almost always there? The bread people? The folks from the dairy? The folks from Frito-Lay and Utz Foods? After all, there was a lot of empty space in the snack food aisle.
Hmm. This could be part of the problem, and I am sure I have written it here previously. However, if I haven’t, let me just put it this way: the US economy is still woefully short a certain type of worker. These are people who do things like pluck chickens, pick crabs, trim beef, drive delivery trucks, stock shelves, work in warehouses, and a whole host of other, but somewhat similar, work.
As I look back on things, this has been a long time coming, and isn’t just a product of the pandemic.
Up until not so terribly long ago, measured in perhaps years but not by many, I used to be able to open a package of chicken or steaks, and use them pretty much as is. The processor, store or butcher had usually done a relatively good job trimming the meat, removing the skin, bones, gristle, and, fat. This was something I didn’t have to think about, at least not much.
However, one night, I bit down into a piece of who knows what in a filet mignon, and ended up with a mouthful of beefy bubblegum. Gross, huh? After that, I started inspecting the meat a little more closely. At first, I would take a little off here and maybe a little over there. However, recently, it feels like I am performing surgery whenever I prepare dinner. Even the so-called ‘boneless and skinless’ chicken will have plenty of fat dangling from it. As for the steak, since when did filets have so much of the stuff, fat that is? When did the NY strips have such thick ribbon on it? What is that? Blubber?
Basically, when did the butchers and processors of the world stop caring? Maybe it isn’t that. Maybe there aren’t as many, and the folks currently doing the job are both short in skill and supply? Remember, they have to buy their sources of protein from someone who is also experiencing a labor shortage. Circular stuff this.
I came to that very conclusion the other night, as I was holding a package of chicken thighs in my hands with a price tag which made my eyes water. However, interestingly enough, a whole, uncut chicken in the same cooler wasn’t that terribly expensive, all things considered. Then, I looked at the beef selection, and noticed pretty much the same thing: any cut of meat which necessitated a bunch of handing, processing, and trimming were in short supply and higher in price. Conversely, the chunks of the XYZ cut didn’t seem to have budged too, too much.
Perhaps I was thinking too much; however, I came to a conclusion: the more processed it is, the more expensive it will be. But what to do about it?
When it comes to your grocery bill, put down the pre-sliced and diced and easy to use stuff, and pick up a sharp knife in the kitchen. Seriously. Plenty of people spend a lot of money on convenience food, of all types. Slice and dice your own fruit and vegetables. Cut up a whole chicken with a butcher knife. Get creative with a top sirloin by slicing it thin across the grain, and serving it over homemade mashed potatoes. Slice up a russet potato into thin fries or chips, and fry them until they are golden brown. These sorts of things.
Want another one? A gallon of Mott’s apple juice is currently $4.98 at Walmart.com. A package of Red Star premier blanc champagne yeast is about $0.82 per packet, and a reusable brewer’s airlock is about $2. Thrown in an extra cup of sugar, brown preferably, wait a few weeks, and voila. You just saved about $15.00 on a gallon of hard cider, had a little fun in the process, and didn’t go blind either. Ha.
While not everyone has the capability to milk a cow or slaughter a hog, there are any number of different things you can do to slash your grocery bill IF only you are willing to do the work. Put another way: much of the price of many of the products you buy is the sheer convenience of it. Are you willing to be inconvenienced a little in order to help out your budget?
Don’t get me wrong. None of what I have written here today is going to completely eliminate the higher prices we are all paying. However, if you pay $0.98 for a decent yellow onion to cut up yourself, instead of $3-5 for one already chopped, if you do that enough times, the savings will start to accumulate. Further, it will force you to see what it is you really want and what you buy just because it happens to be there. I hope that makes sense.
In the end, price increases will eventually slow down, but prices themselves likely won’t go down. What is the old expression: prices go up on the express elevator and come down by the stairs? That is kind of funny because it is true. In the meantime, you can save a few cents here and a few bucks over there by doing some of the work in the kitchen yourself. It isn’t that hard, and can actually be kind of fun.
If you can do that, you might not care if some of the shelves are empty. Further, if you actually save enough, you won’t have to make your own cider…but I would recommend you do so at least once for kicks, literally and figuratively.
Thank you for your continued support. As always, I hope this newsletter finds you and your family well. May your blessings outweigh your sorrows not only on this day but on every day, and may the conflict and bloodshed in Ukraine end quickly.
Chief Economist
Please note, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. My opinion, as those of our investment committee, is subject to change without notice. Finally, the opinions expressed herein are not necessarily those of the rest of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.