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Food Price Tug-of-War Intensifies On Main Street.
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The Federal Labor Department says food prices increased at an annual rate of six percent in January, Grocers report higher prices in most aisles ranging from produce and cereal to household paper products. WOSU’s Tom Borgerding reports the food price tug-of- war is intensifying on Main Street.
At the Sav-A-Lot Store on east Main Street in Columbus, Rochelle Williams and her son are loading groceries into their S-U-V. Its one of several stops she makes in her effort to get the lowest prices on food.
“If you’re not going to a discount store, its ridiculous. I just spent $31 on barely anything.”
Williams and shoppers like her are engaged in a grocery store version of The Price is Right. Sav-A-Lot store manager R.G. Kouns says higher prices for raw materials and transportation are now filtering onto grocery shelves.
“Its not one store or one chain of stores trying to raise their prices its just that the cost of goods is going up so much that they’re going to have to increase things incrementally to cover your own costs.” Says Kouns. But many shoppers take note of even incremental price hikes. Williams says she’s noticed the tick up in prices in nearly every grocery aisle.
“Mainly on the produce and the more natural foods, the prices are really high, your orange juice, your milk, stuff like that its starting to get ridiculous. Toilet paper has even gone up. Q) How do you compensate for that with the higher price? What do you do to keep going? A)Shop three different stores, (laughter) only buy what’s on sale when its on sale. That’s the only way we’ve been making it every month.”
Williams says she’s stopped buying fresh fruit and produce every week to compensate for the higher prices. She now buys the items every two weeks despite complaints from other family members.
“They don’t like it. They love their fresh fruit in the morning. And so, right now, I mean when you’re paying five dollars for oranges. It’s retarded.”
As Rochelle Willaims pinches pennies at the check-out counter, Kouns works to find ways to keep his thin profit margin from disappearing. He starts in the produce aisle.
“For example, the cost of tomatoes, it used to be the cost of a four-pack of tomatoes was around $2.49, $2.29, now they’re almost three bucks. And to break that down, we try and sell them individually so you don’t have to spend as much money, you can get something that fits your budget.”
Kouns adds that food manufacturers are also taking steps to recover their costs. He points to cereal makers who downsize packaging but keep prices the same.
“A prime example is General Mills. If you look at their cereals, if you go from Corn Flakes, or Fruit Loops or anything right on down the line they start off where they used to have 20 ounce boxes, it went to 16′s, then 14′s, now it may be 12. And a lot of them are running the same prices. So, you’re gonna pay about the same price you’re just not going to get the amount you used to. Q) Are consumers aware that they’re buying smaller packages at some point? A) I think they’re aware of it. But, if your kid eats Fruit Loops you’re going to buy Fruit Loops whatever the size of the box is. Again, you don’t have a choice.”
Kouns has also noticed something else. He says shoppers in his store have cut back. Total sales have declined.
“We don’t get as many dollars as we used to as far as sales and whenever you don’t generate dollars you don’t generate that gross profit and its kind of tough to make ends meet.” Says Kouns.
Ohio State University economist Ian Sheldon says so far, food price inflation is mild and further food price increases will hinge in part on crop yields for wheat and corn later this year. Rochelle Williams will closely monitor grocery prices as she stretches dollars to feed family. And if prices keep going up she says she’ll double-down again.
“Go for more of the bulk foods instead of the regular shopping stores.”
Tom Borgerding WOSU News