Stores begin to cut prices as inflation cools
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MEMPHIS, Tenn. – Aja Rideau welcomes price cuts at her favorite stores.
“It’s about time,” the Cordova resident told FOX13. “It’s great that they are really realizing that they’re hurting the economy when they just inflate these prices and people aren’t making that much money.”
On Monday, Target announced small price cuts on 5,000 items across the store. The big box retailer joins the likes of Aldi, H&M, Ikea and Michaels as corporations scale back prices to stay competitive.
“It’s a bit of a relief,” said Nycole Bradford, a Germantown resident. “It’s actually a great help to society as far as parents. You know, kids are very expensive.”
Inflation might be cooling, but consumers also accuse some business of getting greedy.
“A lot of the companies have,” Rideau said. “I think they’ve taken advantage ever since COVID happened.”
According to Forbes, corporate profits increased 22.6% in 2021 and 9.8% in 2022.
Memphis economist Dr. John Gnuschke told FOX13 that many companies kept prices high even after supply chain issues improved.
“Prices could have fallen because the cost to most businesses has fallen,” Gnuschke said. “But they didn’t pass the savings on to the consumer. Now, they’re beginning to see that they have to pass it on to the consumer.”
While shoppers might enjoy cheaper prices, Gnuschke warned that businesses will take in smaller profits. More companies could scale back their workforce in the coming weeks.
“For employers in particular, it puts them in a bind because they now get less money for their goods,” Gnuschke said.
This year, five businesses in Shelby County have announced plans to lay off a combined 487 workers.
“Local businesses will take a hit along with every other business,” Gnuschke said.