In the UK and other countries, food prices are still rising, even though factors contributing to deflation have overtaken those pointing towards inflation. This is for a number of reasons, such as (1) food sellers trying to make profits by keeping prices up even though their costs have fallen and (2) agricultural subsidies. Does that mean we should stock up on food now, before it gets more expensive?
Well, the general economic trend is deflation. And since – in deflation – the price of goods falls, is it better to hold off on stocking up on food, since things will get cheaper in the future? (Hyperinflation will eventually follow deflation; but if you stock up on anything other than canned food now, it may go bad before the runaway inflation hits).
To complicate matters, remember that things could get really ugly. Economists Nouriel Roubini and Nassim Nicholas Taleb have warned of possible food shortages. And leading trend forecaster Gerald Calente says that a “bank holiday” could mean that we don’t have access to our cash for some period of time.
If you buy too much food now, you may be kicking yourself later if deflation drives prices way down. But if you don’t buy enough, you may have to pay sky-high prices to buy scarce food items if a food shortage hits.
So what’s the answer?
Stock up on food that you can buy at discount prices. That way, even if prices go down, you won’t have overspent.
Buy wholesale and bulk when you can (e.g. Costco).
Find a discount grocery store in your area. Ideally, find one that carries good quality food items that have been discontinued because the packaging, brand name or taste doesn’t appeal to the mass market. For example, for people who live in Northern California, this is a good place to find bargains.
Check the expiration date to make sure that you’re not buying food which will go bad before you have the chance to eat it. Even if its really cheap, you’ll be wasting money if you stock up on 2 years worth of something that will go bad next week.
Here are some more tips. And see this and this.