General Mills announced this week that its prices will increase by 7% over the next year.
The cereal company based in Golden Valley, Minnesota, told investors Wednesday that its grocery prices will rise worldwide in the next 12 months.
The predicted 7% increase is the consequence of rising prices for ingredients, packaging, and labor, according to executives with the company, The Wall Street Journal reported.
With COVID-19 becoming less prevalent, “the next few months will be especially critical” for the General Mills brand and other food companies, said Chief Executive Officer Jeff Harmening in an interview with The Wall Street Journal.
Considering that people online grocery shop and stay home far more often because of COVID-19, Harmening said these trends could favor General Mills’s sales in the long run.
The consumer price index surged 5% between June 2020 and May 2021, according to a Department of Labor report, showing the largest increase in a 12-month period since 2008.
Food prices increased 0.4% over that period, and energy prices rose 27.4%, the report says.
Minnesotans have expressed frustration with rising prices affecting their daily lives.
One reader commented on an Alpha News discussion post that her groceries cost an average of $150 per grocery run last year; this year, her grocery bill is closer to $180.
Many commenters expressed concern over the price of gas, which is nearly $1 higher per gallon compared to last year.
In addition to the rise in prices, Alpha News readers also reported a shortage of products in grocery stores and “less variety” in products overall. Many of these examples were meat shortages, specifically chicken, at restaurants and grocery stores, as these products are now too expensive.
In a fiscal overview for 2022, General Mills projected its net sales to decline 1-3% in profits over the next year.