Inflation Impact Study

Inflation has been easing and is nearly back to normal. Yet, Americans’ perceptions of inflation have not really shifted. There’s a lingering view that prices are still out of control. Why is this? Well, first, inflation is cumulative. Even if prices today are rising moderately, they come off very strong increases. In that context, lower inflation means little. Take chicken as an example. So far this year, chicken prices in grocery stores are up by about 0.9% on an annual basis. Not too bad! But that 0.9% increase follows a 28.9% increase from 2019 to 2023. So, the cumulative increase is more like 29.5%. This brings us onto the second point of consumer psychology. Most people, in their heads, hold at least a vague sense of what things should cost. This, as the New York Times recently explained (link to article in comments), is known as the reference price. Today there is a humungous gap between reference prices and actual prices. Most consumers are still living in the price world of 2018 or 2019. That’s not really surprising as pre-pandemic, inflation was incredibly stable and created an embedded sense of what things should cost. Over the summer we asked consumers on our panel what they thought things should cost across various categories and compared it to actual average costs. In grocery, people think prices should be 28.5% lower than they are. In household care products, the gap is 25.3%. The gap is largest in essential products. There's higher inflation here to start. But because these are more frequent purchases people notice price changes and have a better understanding of what prices used to be. They’re also, very often, necessity buys rather than enjoyable discretionary purchases, so there’s likely more resentment of higher prices. Interestingly, in gasoline, perceptions of what prices should be run lower than the actual inflation rate. This is likely because gas prices have always jumped around, so reference prices are all over the place. The key thing here is that there is a divorce between actual data and how people feel. It is taking some time for people to psychologically adjust to inflation. #retail #retailnews #inflation #prices #economy #consumers

Developing Asia and the Pacific’s economic ascent is being severely tested. The conflict in the Middle East is disrupting trade and energy markets. For a region heavily reliant on imported energy, rising prices are feeding inflation and tightening financial conditions.    The impacts remain extremely uncertain and will depend on the duration and trajectory of the conflict. Our latest Asian Development Outlook estimates that growth could slow substantially in the case of a prolonged conflict or further escalation.    The policy response is crucial. Targeted, temporary support can protect vulnerable households and businesses without derailing fiscal health. Clear monetary policy is essential to keep inflation expectations in check. And in this fragile global landscape, deeper regional cooperation is needed more than ever. Strengthening energy connectivity, building more resilient supply chains, and streamlining trade will be critical to reducing vulnerability and unlocking new opportunities. The Asian Development Bank (ADB) strongly supports all such efforts. #ADO2026 sets out these priorities and offers insights to help the region navigate current uncertainty with confidence: https://lnkd.in/gFx9B77r

Are you aware of the hidden costs in your product's raw material? : : Accurately calculating raw material costs is a cornerstone of should-cost modeling. By effectively identifying the materials required, determining the cost per unit, and accounting for potential waste and additional costs like handling and transportation, you can develop a comprehensive and reliable cost model. Key Parameters for Should Cost Process in Material Calculation: # Raw Material Identification: ·  Material type and grade ·  Material source/origin # Material Quantity: · Required quantity (per unit or batch) · Packaging units # Material Cost per Unit: · Supplier quotes · Market prices · Historical data · Discounts and bulk pricing # Material Waste or Loss: · Scrap/waste factor ·  Defects and rejections # Handling and Storage Costs: ·  Material handling · Storage costs (rent, insurance, utilities) · Inventory management # Freight and Transportation: ·  Shipping costs · Delivery method (air, sea, road) ·  Customs and tariffs # Lead Time and Order Frequency: · Lead time variations · Order volume # Supplier Terms and Conditions: · Payment terms · Return and warranty policies · Exchange Rates (For Imported Materials) # Material Substitution and Alternatives: · Substitute materials ·  Material optimization # Environmental and Regulatory Factors: · Recycling or sustainability initiatives · Regulatory compliance # Operational Overheads Related to Materials: · Processing costs · Energy costs ------------------------------------------------------------------------------------- # Ask Yourself: -> Did you consider the net weight and gross weight calculation properly? -> Did you consider scrap weight and scrap cost in your estimation? -> Do you have access to the global raw material index and recent material price database? -> Have you asked your supplier about the raw material cost per kg as well as the scrap cost per kg? -> Do you consider Manufacturing overhead (MOH) and inventory cost (raw materials)? -> What about the scrap cost percentage based on different commodities? -> Did you optimize material through strip layout, nesting, cavity, and other techniques? -> What’s your strategy when the supplier asks for material cost increases due to market fluctuations? -> Did you consider the volume/batch/MOQ impact, as well as regional cost impact, in your calculations? -> Did you consider any coating and primary requirements in the raw material stage? -> Commodity-Specific Considerations, etc.

Food inflation has fallen rapidly, down from 19.3% in March 2023, to 3.3% today (January 2025 – the latest data). This is a relief for many households, but the reality is that there’s been a significant change in the price level of our weekly trip to the supermarket, and it’s hit the least affluent households the hardest. As we all know, falling inflation does not mean falling prices. We now all pay around 30% more for food and non-alcoholic drinks than we did 3 years ago, leading to many consumers having to tighten their belts. In fact, 29% of shoppers say that they are extremely cautious with their spending on food, on strict and tight budgets to manage their finances. A further 39% say that they are careful spenders. Together, that’s over two-thirds of households watching their budgets when it comes to grocery shopping! Our latest research with Vypr identifies four distinct loyalty cohorts, each presenting unique challenges (and opportunities when it comes to loyalty schemes): 🔹 Strict Budgeters (29%) Very careful spenders who meticulously track every penny, typically found in households earning £25k per year or less, but notably, almost a quarter (24%) of households earning £67k or more also fall into this category. Equally spread across age groups, slightly less represented among those aged 65+. Loyalty schemes must offer clear, immediate savings as this group prioritises price above everything and are highly responsive to membership benefits. 🔹 Careful Spenders (39%) Largest group; generally careful about their spending but not overly strict. More likely older (44% of over-65s, compared to 29% of 18-24s), typically in households earning £25k to £67k. Value price and quality equally, seeking extra savings specifically on their frequent purchases. Ideal candidates for personalised pricing and targeted promotional strategies. 🔹 Relaxed Consumers (26%) Take a laissez-faire approach to spending on essentials, yet cautious with luxuries. Evenly spread across age groups, peaking between ages 25-44, with representation rising with household income (27% earning over £67k, compared to just 13% earning under £18k). Prioritise quality, closely followed by convenience and price. Loyalty schemes appealing to this group must balance these three factors. 🔹 Free Spenders (6%) The smallest yet most affluent group, typically older, with the likelihood of membership increasing with age and income. Spend freely without significant concern for costs, prioritising premium quality and exclusive experiences. Loyalty programmes must focus on exclusivity, premium quality, and highly personalised benefits. Retailers must strategically adjust loyalty schemes to resonate strongly with evolving shopper priorities, leveraging targeted insights to maintain competitiveness, loyalty, and consumer satisfaction during these challenging economic times. Explore these critical insights by downloading the full report: https://lnkd.in/eSrRR3R4

Botswana’s Devaluation: A Calculated Response to a Shifting Global and Domestic Landscape - My Two Cents as a Mathematics of Finance Graduate The Bank of Botswana recently devalued the pula by 2.76%, bringing the exchange rate to 13.35 against the USD. At first glance, this might seem modest, but in a nation so tightly linked to global trade, especially in diamonds, beef, and textiles, the implications run deeper than the numbers suggest. So, why now? Let’s unpack the economic pressure cooker behind the move: 1. Falling Diamond Revenues Botswana’s fiscal and export performance is still highly reliant on diamond sales. Global demand for luxury goods has softened amid tightening global monetary policies and geopolitical uncertainty (think: Russia-Ukraine, Red Sea disruptions, and slower-than-expected recovery in China). With De Beers sales softening, the pula has come under pressure. 2. Dwindling Foreign Reserves The Bank of Botswana has been drawing down reserves to defend the currency and meet import bills, especially for essentials like fuel, medicine, and food. Devaluing the pula helps ease this drain by reducing demand for foreign currency and boosting local export competitiveness. 3. Inflation and Imported Costs A weaker pula means higher prices for imported goods. Expect rising costs in fuel, pharmaceuticals, and machinery in the coming months. This imported inflation will likely nudge up the headline inflation rate, potentially prompting future monetary policy tightening. What this means for households and businesses: • For households, budgets will tighten. Higher fuel and transport costs could cascade into food prices, schooling expenses, and medical bills. • For businesses, especially those relying on imported inputs (manufacturing, retail, construction), margins may shrink. Some may pass on costs to consumers; others might delay expansion or rethink sourcing strategies. From a risk management perspective, this kind of environment underscores the importance of: • Scenario analysis • Interest rate & FX hedging • Liquidity planning Policy & Industry Response: • Financial institutions can step in to provide guidance, beyond credit, by offering practical exchange-rate risk training to clients and front-line staff. • Government & private sector collaboration will be key. Globally, we’re seeing a trend of currencies weakening against a resurgent dollar, driven by persistent Fed rate hikes and capital flows toward “safe” assets. Even the South African Rand has faced similar pressure. Botswana is not immune. This is not just a monetary policy adjustment, it’s a strategic recalibration in response to external shocks and internal vulnerabilities. If approached with coordination and foresight, it can help build resilience, stimulate local production, and reshape how we engage with the global economy. Let’s keep talking, analyzing, and most importantly, adapting.

Inconsistent Policies Fuel Market Disruptions in the Pulses Sector!! Inconsistent government policies in the pulses sector have led to severe market disruptions, fostering speculation, cartels, market manipulation, and diversion of subsidized materials meant for government schemes to open markets. This has distorted the pricing and availability of essential commodities for the general public. In January, it was evident that India would face an acute shortage of pigeon peas and chickpeas, along with some shortages of black matape. However, instead of consistent and predictable policies to address these shortages, the government has engaged in on-and-off policy maneuvers. Trade restrictions, such as stock limits and extensions of duty-free imports of yellow peas, have been implemented with short-term positive impacts on the market. But these knee-jerk reactions have caused long-term damage to the overall pulses trade, exacerbating price volatility and uncertainty. The pulses inflation has remained consistently in double digits. Pigeon peas, in particular, saw prices surge to last year's high of ₹130,000 per ton in June, despite the demand being at its lowest point. Speculators took advantage of the situation, driving prices up only to short them later. A similar pattern was seen with black matape, where prices spiked to over ₹110,000 per ton before dropping below ₹90,000. Now, the bulls are back in the pigeon peas market, and prices are recovering on a near-daily basis. Chickpeas followed a similar trajectory, with prices slowly inching up until June when they started moving up steeply from around ₹60,000. Given the current scenario, it's clear that prices are being manipulated by vested interests. There is no justifiable reason for pigeon peas to have reached ₹130,000 in June or chickpeas to be trading at ₹80,000 per ton now. With the festive season approaching and limited availability of pigeon peas and chickpeas in the market, prices are expected to surge further over the next couple of months. The only potential respite lies in the East African crop reaching India quickly, but even that faces challenges due to Mozambique's issues and Tanzania's new auction-based procurement system, which could delay shipments. Freight costs are also rising, and port congestion in East Africa may further complicate the situation. To prevent such manipulation in the future, it is crucial that government policies remain consistent and transparent for a certain period. Policies should not act as shocks but be driven by clear indications. Furthermore, it is essential that the government's interventions in the open market, such as OMSS or retail-side interventions like Bharat Dal and other pro-poor distribution schemes, are managed well to avoid leakages. Consistent and transparent policies, combined with well-managed interventions, are the need of the hour to stabilize the pulses market and protect consumers from price manipulation and supply disruptions.

India has just lost its position as the 5th largest economy in the world... falling to the 6th place... And let's understand how this happened, and what it means for India's economy, citizens, NRIs and investors... India had overtaken the UK in 2022 to become the 5th largest economy in the world... but as per IMF's latest ranking based on Nominal GDP in Dollar Terms, India is now behind US, China, Germany, Japan, and the UK... Broadly, this has happened because of two reasons: 1/ The Rupee has fallen against the dollar by 9% in the past year... and this has reduced our conversion in dollar terms for these rankings even though the economy has grown more than the Germany, UK and Japan. 2/ In Feb 2026, the Ministry of Statistics revised the GDP base year from 2011-12 to 2022-23 which made adjustments to the calculation, and the nominal GDP fell on account of that change by 3-4% in the data than in actual economic output And at the same time, India continues to rank 3rd in the world, after the US and China, in PPP terms of the economy. Now because of this currency devaluation, there are a few ways in which people are getting impacted... First, Foreign Institutional Investors will continue to pull out of Indian markets, as they have been for the past couple of years... as even if the stock markets give 9% return, the currency devaluation makes that return 0 for international investors... And for our markets to appear fairly priced for foreign investors to come in can take another two years of Rupee stabilisation. Over Rs 1 Lakh Crore have been taken out by FIIs in the first three months of 2026 itself, which led to the fall in markets by over 10% Second, the ambition to overtake Japan and become the 4th largest economy in this financial year may get pushed by another year, which dampens our position in international diplomacy conversations around India should be given say a permanent seat in the UN Security Council or greater voting rights in the IMF and the World Bank. The third impact hits most people at home... Because India imports almost 90% of its oil, the depreciation makes oil imports more expensive... say by 9% over and above the price increase caused by the ongoing conflict in the middle east... This is making fertiliser expensive, fuel expensive, foreign travel expensive, overseas education expensive... And while you would say exports become cheaper, but they haven't risen because of the tariff negotiations with the US, being India's largest export market... If you're a wealthy Indian, with a net worth of over USD 1 Million, this is the time for you to evaluate having an international portfolio too, based on your risk appetite, and with professional guidance. And if you're an equity SIP person, keep your investments going, but know that you have to hold for the long term. #casarthakahuja

The €364B luxury market got smaller - but activations exploded. Because closeness now beats scale. From the Luxurynsight Global Luxury Brand Analysis Report H1 2025: ↳ Personal luxury goods fell –1% ↳ Retail activations rose +48% YoY, led by pop-ups and flexible stores ↳ Perfume & Cosmetics (44%) passed Fashion & Leather (32%) ↳ Exhibitions grew +59% YoY, a quiet storytelling tool in times of “luxury shame” The message is clear: brands are shifting from big global ads to local, cultural experiences. From Loewe’s gelato truck in Sydney to Dior’s golden house in Bangkok, retail is becoming a place to connect - not just to sell. For leaders, the takeaway is simple: The next wave of luxury growth will come from meaningful moments with Very Important Clients - not from more volume. Full report download link in comments.

Fantastic report! The 2025 report "Luxury in Transition: Securing Future Growth" on enduring growth in luxury in 2025 which is dependent more and more on quality, sustainability, craftsmanship and long-term value. Key insights: →After a 2% contraction in 2024—the first in over a decade—both brands and consumers are being challenged to rethink what luxury means in a world that demands responsibility. →Sustainability is an economic lever: As Bain states, decarbonisation is not a cost burden—it’s an investment in resilience. Brands that lead in carbon reduction are already seeing benefits in consumer trust, operational efficiency, and premium positioning. →Craftsmanship underpins long-term value: In a saturated market, the luxury that lasts—through superior materials, artisan techniques, and timeless design—is what retains customer loyalty and brand equity. →Circularity is good business: Business models that include resale, repair, and rental are gaining traction. These not only extend product life and reduce waste, but also deepen engagement and open new revenue channels. →Generational shift is reshaping demand: With Gen Z and Millennials now driving over 70% of luxury growth, their values—authenticity, transparency, and environmental responsibility—are reshaping the sector. →Geographic rebalancing opens new opportunities: As 50 million consumers exit mature markets, growth is accelerating in Southeast Asia, India, and Latin America—regions where sustainable luxury holds distinct appeal. Additional highlights: Decarbonisation is emerging as a financially sound strategy for fashion brands. Research indicates that most fashion companies can reduce their greenhouse gas emissions by over 60% at a cost of less than 1–2% of their revenues, making significant environmental impact achievable with modest investment. According to another report, companies leading on climate action, including fashion brands, reported financial gains equivalent to over 7% of annual revenues, driven by operational efficiency, product innovation, and increased customer loyalty. The economic case is clear: investing in sustainability—especially through decarbonisation and long-lasting craftsmanship—is not only a moral imperative, but a commercial strategy for long-term success. Report: Bain & Company / Data sources: McKinsey & Company, Boston Consulting Group (BCG) #sustainableluxury #decarbonisation #craftsmanship #longtermvalue #luxurystrategy #circularbusiness #esg #bainreport #futureofluxury

The CPI can tell you what’s happening on average. But it can’t tell you what it feels like to buy groceries in Greensboro, grab lunch in Austin, or stock up on essentials in Memphis. That’s the gap we’re trying to fill with DoorDash’s latest State of Local Commerce update — our first quarterly look at how prices are actually moving across cities, categories, and everyday purchases. A few things that stood out to me: 1. The grocery story is improving. Our Breakfast Basics Index — the price of three eggs, a glass of milk, a bagel, and an avocado — is down more than 22% year-over-year as of March 2026, largely due to egg prices normalizing after last year’s spike. But whether you're in Greensboro, NC or Gilbert, AZ can be a significantly different price at checkout. 2. Restaurant prices are stabilizing Restaurant price growth overall is in a similar range (+3.2% year-over-year), suggesting a more moderate, steady trend. That tracks slightly below the latest food-away-from-home CPI released earlier today (3.8% year-over-year). 3. Everyday essentials are… essentially flat. The items people buy every week — diapers, detergent, toothpaste — are down slightly (-0.3% year-over-year). Not dramatic, but important: it means one part of the household budget isn’t getting squeezed further. 4. There is no single “economy” right now. There are thousands of local ones. A cheeseburger meal costs $12.47 in Lincoln, NE. Breakfast basics are cheapest in places like Greensboro, NC ($2.60). Everyday essentials are most affordable in Memphis, TN ($51.93). Where you live still shapes what you pay, by a lot. This is why local data matters and why we're committed to routinely sharing what we see across the DoorDash platform as part of our State of Local Commerce. Check out the data for yourself:  https://lnkd.in/eNyB-xPt