Hy-Vee asks food suppliers to lower prices amid inflation

Hy-Vee, along with several other grocery chains including Walmart and Whole Foods, are pushing food suppliers to lower their prices, according to NBC News.

Why it matters: The higher costs from suppliers are largely being passed down from grocers onto consumers.

• The federal government recently released numbers showing grocery prices were 11.3% higher in January 2023 than at the same time last year.

What they're saying: "We're spending more time than we've spent in the past negotiating prices and negotiating cost increases — frankly, questioning cost increases and pushing back," Hy-Vee CEO Jeremy Gosch told NBC News.

State of play: Grocers typically negotiate with suppliers to set pricing, especially if they have their own name-brand alternative to create more competitive costs.

• Hy-Vee is considering bringing up Topco, a cooperative of grocers that creates their own private-label brands, in negotiations with major suppliers, according to NBC News.

Between the lines: Shoppers for the most part are stuck paying the increased food costs. But at the end of 2022, there was an increase in consumers buying cheaper, private-label products in comparison to 2021.

• Grocers may have more negotiating power with suppliers if that trend continues, but it's unknown if it'll actually lower costs for consumers, according to Reuters.

What's next: Gosch said it's unlikely food prices will flatten in the next six months.