Deflation could put pressure on retailers and brands to drive more volume, debut innovative products and find other ways to cover costs such as higher wages.

Key Points

  • As shoppers await price cuts, retailers like Home Depot say their prices have stabilized and some national consumer brands have paused price increases or announced more modest ones.
  • Yet some industry watchers predict deflation for food at home later this year.
  • Falling prices could bring new challenges for retailers, such as pressure to drive more volume or look for ways to cover fixed costs, such as higher employee wages.
  • treefrog@lemm.ee
    13·
    8 months ago

    Some inflation is necessary to prevent wealth hoarding. It’s one reason we moved away from the gold standard.

    Minimum wage needs to be tied to it though because we’re still seeing a huge amount of wealth disparity which is exactly what inflation is meant to solve.

    • hark@lemmy.world
      4·
      8 months ago

      Inflation doesn’t prevent wealth hoarding. In fact it benefits non-cash assets which the rich hoard plenty.

      • treefrog@lemm.ee
        1·
        8 months ago

        That’s an issue with non-cash assets (like cash was when we moved away from the gold standard). And why Bernie suggested they be taxed heavily.

        But the intention of inflation, was to prevent the hoarding caused by the gold standard.

        • hark@lemmy.world
          1·
          8 months ago

          How does reducing the value of cash prevent hoarding of gold (which would be worth more cash then)?

          • treefrog@lemm.ee
            1·
            8 months ago

            It’s not to prevent hoarding gold, it’s to prevent hoarding money. When tied to the gold standard when gold is worth more, money is worth more, and vice versa. By not selling my gold (or using my money), the gold (and cash) in circulation becomes artificially worth more, as the law of supply and demand dictates. This encourages the hoarding of cash because your money becomes more valuable the less money is in circulation.

            The paper standard solves this through yearly inflation and decommodifying money. Commodities are subject to the law of supply and demand. Paper money isn’t and shouldn’t be. When both currency and the things we buy with currency are subject to the law of supply and demand, the system breaks down, essentially.

            So, we no longer tie money to commodities. A lesson we learned the hard way, unfortunately.