No. of Recommendations: 15
Original price--$1.00 (2023).
Up a bit 2024---$1.12 to $1.17.
Start of 2025---$1.67 (chocolate demand up a lot and prices worldwide up about 50%).
New price(07/24)$2.44 (tariff-included price--up 46.10+% based on non-tariffed price).
Thanks for the data point.
Back of the envelope:
Walmart's gross mark-up on consumables might be in the vicinity of 25%. So if the price at start of this year was US$1.67, they might have a cost basis of around $1.33? Shipping is negligible at their scale, so their import cost basis might be around $1.30. (I am making this up as I go along). It's hard to keep track of the changes multiple times per day, but I think the current tariff rate is about 20% on EU-source foods. So the tariff increase might have added around $0.26. Assuming they need the same margin on ALL their costs, that might bring sales price to a nice round $2.00. But you're seeing $2.44.
So, we can guess that the rest of the increase in price is for other reasons. One of which is simply that the US dollar has fallen a lot this year. IF the supplier kept their wholesale price constant in euros, (certainly not an obvious assumption for supply to a buyer with the power of Walmart) that would probably explain it. The US dollar has fallen more than 11% against the euro so far this year, and nearly that much against most other majors.
The scarcity of cacao may be one reason that chocolate sellers aren't cutting their margins to keep selling prices the same...at some point, it's better to take a hit to volume and market share than to take a loss. I think there are probably many vendors who are, for the moment, doing what Mr Trump wants: cutting their own margins to keep end user prices in the US constant. But that can't last. Nobody is in the business of losing money forever.
Jim
