Weekly Updates
Weekly Updates
- Since 2020, consumer food prices have risen significantly in many developed economies. Consumers remember and obsess about the prices of high frequency purchases like food, making them angry about soaring prices.
- Germany stands out as a country with an especially large increase in food prices since the start of 2020—an over 30% cumulative price increase. This is a broad-based price rise—one or two items have had only a 20% increase, but they are relatively few in number.
- A quick trip across the border to Switzerland, and food price have risen less than 6% over the four years since January 2020. In every single category of food, Swiss prices have risen less than those of Germany. It does not matter whether the product is predominantly local (Swiss bread prices rose 9%, German bread prices 36%), or with a higher global commodity content (Swiss coffee prices rose less than 7%, German coffee prices 19%).
- These price differences remind investors that what happens after the farm gate matters most to prices. Part of the price difference comes from the costs of processing food in Germany. But it also says something about profit-led inflation. Swiss consumers may have rebelled more strongly against profit-driven price increases.
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