For the second year in a row, American shoppers are seeing double-digit inflation in the candy aisle
For the second year in a row, American shoppers are seeing double-digit inflation in the candy aisle. Candy and gum prices rose 13% on average this month compared to last October, more than double the 6% increase in all grocery prices, according to Datasembly, a company that tracks retail prices. This is in addition to a 14% increase in candy and gum prices in October 2022.
“Candy has gotten so expensive,” said Jessica Withers, a small business owner in Shiloh, Illinois. “It doesn’t make sense for me to spend $100 on candy.”
Withers said she usually buys a lot of candy for trick-or-treating and events at school and church. But this year, she only bought two bags and plans to turn off the porch light on Halloween when it runs out.
Other consumers are changing what they buy. Market research firm Numeritor said its surveys show that about a third of American consumers plan to trade down value or stock up on brands when purchasing candy to trick-or-treat this year.
Weather is the main reason for higher prices. Cocoa prices are trading at their highest levels in 44 years after heavy rains in West Africa limited production in the season that began last fall. Now, El Niño conditions are making the region drier and will likely continue into spring.
“There may not be any rate easing on the horizon, at least through the first half of 2024,” said Dan Sadler, director of customer insights at market research firm Circana.
Ivory Coast — which produces about 40% of the world’s cocoa — is already showing signs of one of its worst droughts since 2003, said Kelly Gojari, senior research analyst at Gro Intelligence, an agricultural analytics firm.
Meanwhile, Al-Gujari said global sugar prices have reached their highest levels in 12 years. India, the world’s second-largest sugar producer after Brazil, recently banned sugar exports for the first time in seven years after monsoon rains hurt the upcoming harvest. Thailand’s production also declined.
These costs, combined with increases in labor, packaging and ingredients such as peanuts, drive up the prices of all types of candy.
Discount grocer Aldi is advertising a 250-count assortment of Mars Inc. chocolate bars. – Including Milky Way, Twix and Snickers – for $24.98. Two years ago, the same package was advertised at $19.54.
The Hershey Company — which has raised its prices by 7% or more in each of the past seven quarters — acknowledged this week that higher prices are negatively impacting demand. Hershey’s confectionery sales volumes in North America declined 1% in the July-September period.
“We know that value and affordability continue to be top of mind for consumers as budgets are pressured,” Michelle Buck, Hershey’s president and CEO, said Thursday on a conference call with investors.
Hershey is trying to meet consumer needs with value store offerings and package sizes at different price points, Buck said.
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