Is inflation on the horizon?

Deflation was a big topic of discussion at PLMA’s 2016 Private Label Trade Show last week in Chicago. President-elect Donald Trump’s name also came up.

Interestingly, Trump and deflation may have much to do about each other.

Neil Stern, a senior partner with McMillan Doolittle, a Chicago-based business management consulting firm, said during a PLMA seminar last week that deflation is putting more money in consumers’ pockets but it’s also shrinking retailers’ profits.

“What retailers are looking at right now is a bit unprecedented,” Stern said. “This has been the longest stretch of food prices going down in about 50 years.”

But Trump’s election could bode well for food retailers, including supermarkets, convenience stores, mass merchandisers and others that sell brand-name and private label products.

According to cnn.com, deflation could lead to inflation under Trump’s economic stimulus plan. Prices could soon increase for agricultural commodities, pushing up food prices.

Rodney McMullen, CEO of Cincinnati-based The Kroger Co., told CNBC last week that the hope is that Trump’s stimulus plan will provide more money for consumers, who will keep spending even if prices go up. But it’s all speculative now.

Still, the stock prices of several public supermarkets have surged since Trump’s election, which means the market is betting on inflation.