It came as no surprise when Home Depot recently announced the worst of inflation could be behind us. The news was a relief to both retailers and shoppers alike, as prices on goods have recently been volatile and unpredictable.
Inflation is an increase in the general level of prices of goods and services over a period of time. When demand decreases, it drives prices down – creating deflation. When there is an increase in demand, it can cause prices to increase as well – leading to inflation.
In this case, Home Depot’s announcement of the worst of inflation could be over is great news. This could mean more stability when it comes to prices and less volatile swings in pricing, helping both retailers and shoppers alike.
The company said it has seen pricing coming back in line with what is expected, as opposed to the recent upward pressure it has seen on the cost of goods sold, which has caused prices to rise.
This news comes after the US consumer price index rose 1.4% in the month of July, which was the largest increase in the consumer price index since 2012. Prices for items such as new vehicles and apparel increased 6.7%, while prices for used cars and trucks increased 2.7%, according to the Labor Department’s report on the trend.
The good news for shoppers is that retailers should be able to keep prices steady and no longer have to jump through hoops to keep up with the rampant inflation. Consequently, this news should encourage consumers to have a renewed confidence in terms of long-term purchases like cars and furniture. Better still, the news should also result in more shopping activity both in-store and online, as shoppers can make purchase decisions with more certainty.
Home Depot’s news that the worst of inflation should be over should give retailers and shoppers alike a sense of security in the retail market. With the cost of goods becoming more stable, both retailers and shoppers can enjoy competitive pricing and stability in the market.