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Wednesday, June 25, 2008

More on Inferior Goods

by Calculated Risk on 6/25/2008 04:25:00 PM

Here is some more evidence of consumers shifting to inferior goods - from Bloomberg via the LA Times: Earnings jump 15% at Kroger, operator of Ralphs.

Consumers bought more store-branded products ...
Generic or store-branded products are classic inferior goods. Sales for store-branded products typically increase during tough economic times, and decrease when times are good (as consumers shift back to name brands).

On the same store sales increase of 5.5% - isn't that just related to higher prices for food products?