|
 |
 |
Thanksgiving is a time of traditions: driving or flying to visit family and friends, watching the Macy’s Thanksgiving Day Parade, strategizing for Black Friday sales, and of course, enjoying a turkey dinner. Another tradition, rumored to have begun with President Truman, is the annual pardoning of turkeys by the US President. And this year was no different when President Trump pardoned Gobble and Waddle.
More importantly, Trump made reference to the price of turkeys, noting that they had fallen dramatically. Inflation has been a major political and economic issue over the past few years, but it now seems like every single holiday is seized by political opponents to describe how bad inflation really is (or isn’t). What’s the cost of hot dogs and hamburgers this Independence Day versus last year? How does a bucket of Halloween candy compare to last year?
Thanksgiving is no different, and given the increasing weight of affordability (food, housing, etc) in the minds of voters, it’s not surprising that the price of a turkey dinner is a topic both incumbents and challengers want to use to spin a narrative. Surely there is an objective answer to the question of “Did the cost of a Thanksgiving dinner increase or decrease this year?” And that answer presumably sheds light on the state of inflation and the health of the economy, right? Sadly, no. Depending upon who you ask, you can get wildly different answers.
The “Cheaper” Camp
The American Farm Bureau Federation says that the average Thanksgiving dinner for 10 people will cost $55.18, down 5 percent. Wells Fargo estimates that the cost has decreased by 2-3 percent. And every year Walmart announces the cost of its Thanksgiving meal, using a mix of brand names and its private label offerings. This year its offering can feed a family of 10 for less than $4 per person, its lowest cost yet. While this is down 25 percent, Walmart doesn’t necessarily use the same products in its basket every year.
 |
The “More Expensive” Camp
Meanwhile, the Deloitte Thanksgiving Index reports that the cost to feed a family of eight is up a modest 0.6 percent. The Associated Press (AP) says it’s higher, reporting that a basket of 11 Thanksgiving staples is $58.51, 4.1 percent more expensive this year than last year, and the progressive thinktank The Century Foundation calculates that Thanksgiving costs jumped a whopping 9.8 percent.
 |
Just to be clear, the perspectives I shared (and I’m sure there are more!) mean the price of a Thanksgiving meal has either fallen by as much as 25% per person or risen by 10%? Why the wide range? Well, simply put, a meal is not a meal is not a meal. The price of a Thanksgiving dinner (unsurprisingly) depends on what you have as part of your dinner. The mix of products has a big impact on the total price, and further, annual changes to the meal’s composition make year over year comparisons impossible. Imagine if one estimate included lobster mac and cheese with mini-cubes of filet mignon drizzled with truffle oil for this year, when the prior year had baked potatoes?
While the cost of some items (like stuffing and rolls) appears to have risen this year, the cost of others (like mashed potatoes and pumpkin pie) went down. So, the cost of Thanksgiving dinner is going to vary depending on what the meal includes as well as where the ingredients or meal was purchased.
But there is one near universal constant when it comes to Thanksgiving: the turkey. And because it usually accounts for a disproportionate share of the meal’s total cost, perhaps we could simplify our analysis by just focusing on the price of the bird? For the most part, turkey prices are down. Datasembly sees a 2 percent decrease in the price of 10 pound turkey while Deloitte has it at a modest 0.4 percent increase. This year, Walmart’s Butterball Turkey is $0.97 per pound, its lowest price since 2019.
So great, inflation is down! Not so quick. Might lower turkey prices be an active retail strategy in a time of falling consumer confidence? Some grocers use turkeys as loss-leaders to get shoppers in the door, knowing that they’ll also buy side dishes and desserts (presumably at higher prices with greater profits to the retailer). Maybe turkey prices don’t tell the story, even if they do help consumers at the checkout register.
 |
So, what does all of this mean about the state of the economy? Not much. Unless there is consistency in the specific items purchased across years, measurements are nothing more than fodder for new articles and political debates. Sadly, it does seem the stories you read about Thanksgiving inflation are presented with a political bent. Data can be (and often is) manipulated to support almost any narrative.
So here's my best advice for navigating Thanksgiving inflation uncertainty: Instead of stressing about the implications of turkey or cranberry prices for your 401(k) or future car payments, enjoy an extra helping of stuffing and grab an extra piece of pie. Don’t worry about what it means. After all, we’ll soon be debating the price of Christmas trees.
FROM THE ARCHIVES
Our Bulging Thanksgiving Waste | ||||||
| ||||||
 | ||||||
As part of a long-standing White House tradition, President Barack Obama is widely expected today to pardon two turkeys—Tater and Tot. And while only one of them will earn the title of “National Than… | ||||||
|
 |
VIKRAM MANSHARAMANI is an entrepreneur, consultant, scholar, neighbor, husband, father, volunteer, and professional generalist who thinks in multiple-dimensions and looks beyond the short-term. Self-taught to think around corners and connect original dots, he spends his time speaking with global leaders in business, government, academia, and journalism. He’s currently the Chairman and CEO of Goodwell Foods, a manufacturer of private label frozen pizza. LinkedIn has twice listed him as its #1 Top Voice in Money & Finance, and Worth profiled him as one of the 100 Most Powerful People in Global Finance. Vikram earned a PhD From MIT, has taught at Yale and Harvard, and is the author of three books, The Making of a Generalist: An Independent Thinker Finds Unconventional Success in an Uncertain World, Think for Yourself: Restoring Common Sense in an Age of Experts and Artificial Intelligence and Boombustology: Spotting Financial Bubbles Before They Burst. Vikram lives in Lincoln, New Hampshire with his wife and two children, where they can usually be found hiking or skiing.
You're currently a free subscriber to Navigating Uncertainty. For the full experience, upgrade your subscription.
| ||||||||||
