Consumer prices in U.S. little changed as inflation recedes

Extending Discounts

Target, the second-largest U.S. discount retailer, plans to build on holiday spending gains by extending discount policies that attracted shoppers last month. The Minneapolis-based company is pledging to match the prices year-round charged by the e-commerce sites of Inc., Wal-Mart Stores Inc., Best Buy Co. and Toys R Us Inc. in a bid to boost sales.

The new policy, which takes effect immediately, will combine Target’s holiday-season price policies into one year-round and easy-to-use system, the company said in a Jan. 8 statement. Target’s stores will also match the prices of goods found on its own website, it said.

James Buettgen, president and chief executive officer of Ruby Tuesday Inc., said the Maryville, Tennessee-based restaurant chain is focused on keeping “the right balance” between offering discounts and using other marketing tools as the U.S. economy continues to recover.

“To totally walk away from price incentives like coupons in such a competitive environment, in such a challenging consumer environment, would be a foolish decision,” Buettgen said on a Jan. 9 earnings call.

Other Measures

The CPI is the broadest of three monthly price measures from the Labor Department because it includes goods and services. About 60% of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

Wholesale prices in the U.S. dropped for a third month in December as food costs fell by the most since May 2011, the Labor Department reported yesterday. For all of 2012, prices paid by companies climbed 1.3 percent, the smallest advance since a drop in 2008 and compared with an average 3.4% gain over the prior decade.

Import prices also declined in December, a Labor Department report showed Jan. 11. For all of 2012, import prices fell 1.5%, the first annual drop since they retreated 10.1% in 2008.

Bloomberg News

<< Page 3 of 3

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome