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2012 Consumer Goods Outlook – Ouch!

So did you bring in the New Year with a bang? Still feel it in your head? Unfortunately, your headache may linger. 2012 is shaping up to deliver a pain in the pocket book, too.

If you were living under a rock last year, we want to be the first to inform you that 2011 wasn’t so pretty, economically-speaking. Unemployment floated close to 10%, prices for everyday things rose 6%, foreclosures rates were high, gas rose 16% on average from the previous year, cotton is at a high that hasn’t been seen since Ulysses S. Grant was in office, the freeze in Florida will surely affect the costs of any citrus-based drinks, the peanut crop is having the worst harvest in 30 years… and so on and so on and so on…

So here’s the good news – okay…there’s not that much good news. The outlook for 2012 isn’t promising to be much better.

We didn’t set out to write a doomsday blog but, jeez, things are tough!

But, as “they” always say, if you can’t beat it…learn about it, understand what you’re up against, and plan for it!

Here are a few facts and figures to keep in mind for 2012:

1. Grocery prices rose 6% on average in 2011. With the cost of raw materials on the rise (expected to rise another 2% in 2012), manufacturers are shrinking the packaging, while raising the prices. At one retailer, the packaging design for one brand of dog food remained the same except for one tiny little detail: instead of 20 lbs, it now reads 16 lbs. Toilet paper rolls now fit in the recessed fixtures of older homes when they didn’t only a mere 8 years ago. Pay close attention to what you’re paying versus what you’re getting.

2. With constant turmoil in the Middle East, gas prices are expected to rise over $4. Maximize your errands by plotting the route so you aren’t doubling back, etc. Also, stick the kids on the bus, carpool. And c’mon Chevy – how about an energy efficient car that doesn’t explode!?!?!?

3. Shipping for US Postal Services, FedEx, and Ups is expected to go up around 5% more. Our days of buying items from online retailers that “ship for free” might be coming to an end. So, if you are buying online, try to bundle the shipping for several items from the same retailer to save on shipping costs.

4. Need Caffeine to start the day? Here’s where it’s going to really hurt the most. According to Bloomberg news, the beans needed to produce a caffeinated drink may rise as much as 40%. Not big into caffeine but chocolate is your vice? Due to the instability in the Ivory Coast (the largest cocoa producer) Hershey Co. announced at 9.7% increase in wholesale prices. We don’t want to sound like crazy cranks…but stockpiling some chocolate may not be a bad idea!

5. Higher oil prices will affect us in ways that we just don’t think about. Take diapers as an example. Kimberly Clark, the maker of Huggies, will be increasing prices 3-7% this year. Maybe it’s the impetus you need to potty train the kids or your kids’ kids. Godspeed, my friend.

Most of us try as hard as we can to live within our means…and knowing what we’re up against, money-wise is critical. Whether you are a senior on a fixed income or working in the job market – cost of living adjustments (aka raises) were few and far between in 2011…and may be even scarcer in the future. So be sure to stay educated on the rising prices in consumer goods. It’s a good start for budgeting in an every-changing world where day-to-day decisions will impact your long-term income plan.

Call us to help you with your long-term financial plan. Putting a plan in place now will help you ring in future years with less potential for headaches.


Cathy DeWitt Dunn, President of DeWitt & Dunn, LLC, is the driving force behind Women Money & Power. With decades of experience in the financial services industry, Cathy specializes in helping individuals and families strengthen their retirement outlook with lifetime income solutions not available from traditional brokerage houses. She has helped countless investors start their personal journeys towards a stronger retirement with strategies designed to protect principal, generate retirement income that can’t be outlived, and eliminate market loss.

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