However, at a 10 percent increase, that adds up to an extra $20. The USDA recommends that the average family of four spend approximately $200 a week on groceries. These are popular brands that people enjoy buying from.Ī quick trip to the grocery store could mean spending 10 percent more than what Americans are accustomed to spending. They have over 100 brands on the market, including Nature Valley, Pillsbury, Yoplait, and many more. General Mills sells a lot more than just cereal. Fruit Loops could end up costing 7 to 10 percent more than it did last year. The bigger problem lies in the costs in which the companies will have to sell their products. The nature in which people purchase packaged foods will ever be evolving. The bigger problem is not that General Mills and other companies don’t have comparable sales. It means that they will still see quite a few added sales over years prior to the pandemic, such as 20. This is good news for companies that offer packaged food and meals. Restaurants are opening, farmer’s markets are opening, and more people are headed out instead of staying in.Īs General Mills pointed out, “Away-from-home food demand is expected continue to recover in fiscal 2022, though not fully to pre-pandemic levels.” People don’t need at-home food like they did in the height of the lockdown.

The country is no longer in a pandemic lockdown. Many other packaged food companies are seeing similar patterns in spending as well as in the cost of goods.Ĭomparable sales are of particular interest to companies like General Mills.

General Mills isn’t the only one feeling the heat of an inflationary environment, either. As households are getting smarter about how they spend money, net organic sales are on the decline. The cost of goods line item is expected to soar by 7 percent.Īdjusted earnings per share of General Mills stock have already dropped from $1.10 in 2020 to $0.91 in 2021. The cereal company has to focus on their margins – and since they’re seeing costs rise, they have no choice but to raise their own costs. General Mills has already announced that they are working in an “inflationary environment” and warns that they will be hiking prices to compensate. And, inflation is becoming more and more prominent.

Price of fruit loops