Inflation has been a major thorn in the side of businesses and consumers since the pandemic. The good news is that inflation dropped again in July and is now down to its lowest since February 2021. The bad news is that shoppers haven’t been feeling the effects of this change and it’s certainly not playing out when it comes to pricing and spending. Further complicating matters are the upcoming Presidential election and the potential crackdown on high prices that political candidates have floated during campaign speeches. The question then becomes, how do you right this ship before politicians try to right it for you?

Some level of panic has already set in. Starbucks just removed their CEO after two consecutive quarters of negative same-store sales. It seems like a knee jerk reaction from the outside, yet it could also be the proper one and it gives us insight into just how concerned a powerhouse like Starbucks is. McDonald’s, another restaurant giant, just posted their first negative global same-store sales since the pandemic. They have yet to remove any executives; however, they have extended the timeline for their limited $5 value meal and are pushing a new flagship burger through development as quickly as possible. It’s not just restaurants either, most industries outside of grocery stores are feeling the spending crunch. Store closures and bankruptcies seem to pop up every day.

Consumers have heard that inflation is going down, yet they haven’t necessarily seen that reflected in their daily life. Prices will likely shrink as spending comes down and we have started to see that happen in some cases. Companies that were adamant about maintaining current prices a year ago have now dropped that strategy in favor of specific price cuts. It is likely that this price-cutting strategy will expand and include even more companies as the year goes on. The urgency behind these endeavors is rooted in the need to reverse current negative sales and create a buffer against the uncertainty clouding the rest of the year.

The November sales spike could be less than usual and the Presidential election taking place that same month increases the chances of a less than stellar return. The election cycle, an especially tumultuous one at that, has contributed to lessened spending. Adding fuel to that fire is Vice President Harris’ recent claim that if elected, she will propose a federal ban on grocery and food price gouging. Her campaign has also said that they will increase the scrutiny put on mergers within grocery and foodservice. Former President Trump has focused more on tariffs and a large part of his campaign has been the commitment to reversing the high prices that consumers have faced over the last four years.

It’s become clear that no matter who wins, massive pricing changes could be in store for companies next year. Government mandates are often applied unilaterally without finesse and even those corporations who could survive such a change don’t want to see it happen. That is why we have seen such drastic steps taken and it is likely that these measures will only increase over the next few months. Inflation should continue to drop, and prices will need to come down with it. The recent frenzy of corporate moves shows that we have reached a critical point in the year, and we should expect companies to make every effort possible to change the course of 2024.