A Dose of Inflation May Be Just What Retailers Need

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Like the Chinese character that means both crisis and opportunity, the recent spike in the Consumer Price Index — inflation — may not be quite the retail calamity that some of the headlines have suggested.


In fact, a shot of inflation may be the best medicine there is for an industry savaged by the pandemic and, before that, ground down by nearly a decade of constrained price flexibility.


Those who are worried point to the surge in real estate prices and the stock market, trends reminiscent of the last inflationary period (2004-2007) which accompanied a similar rise in home and stock prices. That boom ended with a spectacular crash in all asset categories, wiping out the savings of millions and lingering for years. Or they cite such anomalies as the breathtaking prices of used cars: on average, a pre-owned pickup truck now costs almost twice what it did a year ago, according to CarGurus.

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