retail news in context, analysis with attitude

The Los Angeles Times reports this morning that “breakfast is getting a lot more expensive. Coffee is now up there with other increasingly expensive essentials such as milk, bread and eggs. Overall, the cost of groceries is rising at the fastest rate since 1990, according to the federal Bureau of Labor Statistics.

“The increase for coffee started with Starbucks raising drink prices in July. Other coffee chains followed suit. The big supermarket brands, including Folgers, Maxwell House and Chock full o'Nuts raised prices twice in the last two months, including last week. World coffee prices have risen 23% over the last six months … Coffee prices have risen so fast that even some traders are starting to get nervous. Last week the cost of a pound of coffee eased a bit on the world commodities markets. That was the first significant drop in months and reflected investor fear that the U.S. might be headed for a recession that could slow demand for coffee and other goods.”

KC's View:
The drumbeat of bad financial news continues. And I would make this point yet again – that while investors may be fearful that the nation is headed toward recession, most consumers are pretty well working on the premise that we’re already there.