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Food inflation shot up 7.4% in January on top of the 3.7% gain that was recorded in 2020. The higher prices have not peaked yet with the two-year monthly comparison rising sequentially all the way to +11.2% in January from a pace of just over 7% in July.
Oppenheimer weighed in on the CPI report on Friday. The firm said the environment remains conducive to passing through higher costs with modest transitory headwinds in certain categories. While the high levels of inflation continue to represent potential negatives for food suppliers like Sysco (NYSE:SYY) and US Foods (NYSE:USFD), retailers like Albertsons Companies (NYSE:ACI), BJ's Wholesale Club Holdings (NYSE:BJ), Costco (NASDAQ:COST), Kroger (NYSE:KR), Sprouts Farmers Market (NASDAQ:SFM) and Walmart (NYSE:WMT) could see a net positive impact from food inflation if things go right.
"Going forward, we are closely watching for signs of consumer resistance amid headwinds from waning stimulus. Consistent with our deep dive on food inflation here, we expect elevated level of food inflation to last at least through 2022, and potentially longer, based on our review of historical cycles."
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Dig through all the mentions of "food inflation" in transcripts posted on Seeking Alpha.