Karin Davenport, NCC News, Syracuse
The R-word is abounding in presidential candidates’ speeches, TV talk shows, and street corners. With the fear of a recession on the horizon, many people have started to worry about the cost of everyday goods. From eggs to meat to even the price of a candy bar, prices are raising rapidly. Last year saw the highest national food price increase in seventeen years. Now, many experts are saying the price hikes can be attributed to one thing: the price of gas.
Changing Shopping Patterns
Syracuse shoppers say they have noticed food price increases… and so have their bank accounts. Many say they have switched grocery stores—shopping at discount stores like Aldi or Price Chopper instead of bigger conglomerates like Wegmans—in hopes of finding cheaper prices.
“You have to shop around and look for cheaper prices, but then you’re wasting time and gas shopping around,” says Shiela Muters, a resident of Marietta.
Onondaga Hill resident Tony Fair agrees, “We look for more bargains, things on sale, day old stuff.”
But even shopping for sales isn’t what it used to be. From a year ago, the average cost of a dozen eggs is up 37 percent, and milk prices have jumped 29 percent.
Booming Business… to Bombing Out
Small businesses have faced even more problems than consumers. Increases in the cost of goods they buy have forced them to raise prices to customers. At Columbus Bakery, owner Jimmy Retzos says since December 2007, the price of a bag of flour has gone up ten dollars. Usually, he only faces a twenty-five to fifty cent increase. Because of the increased cost, Retzos has had to raise prices—a loaf of bread has gone from $1.75 to two dollars.
A similar situation has arisen at Empire Brewing Company. The restaurant has had to overhaul its menu, raising the price of some dishes by fifty cents. But General Manager Jane Shawcross says increasing menu prices is not enough to make up for their lost profits.
“We’re also consolidating menu items. So that, for instance, we’re go[ing to] have more shrimp items on the menu; try to use more of the same product in different dishes,” she says.
Empire’s brewing operations have also faced changes because of the increase in hops and malt, two of the main ingredients needed to make beer. “A lot of farmers have taken the land that they were using to grow hops and malt and started growing corn, because that’s a really hot commodity right now,” Brewing Director Tim Butler explains.
Butler says the increase in his cost of hops and malt has forced him to raise beer prices by fifty cents a pint. “I think that’s pretty typical in a lot of restaurants. You’re go[ing to] see prices being raised a couple dollars a dish and, you know, it’s just so they can remain profitable,” Butler says.
Grim Future
Even with the changes restaurants and consumers are making to account for the increase in food prices, economists say prices probably will not go down anytime in the near future. But Don Dutkowsky, a Professor of Economics at Syracuse University’s Maxwell School of Citizenship and Public Affairs, says prices should level off.
Dutkowsky says because consumers and businesses have less money to spend, the economy should slow down. And less demand for products, he says, should help prices level off.
“I think they’ve spiked primarily due to energy prices in the transportation and distribution of food here. I think the food price increases are going to moderate, but they’re not going to go back down,” Dutkowsky says.
For now, Dutkowsky suggests that consumers reallocate their budgets to see what they can afford. As Karin Welch, an Onondaga Hill shopper put it, “The packages get bigger and the insides get smaller.” But for now, all anyone can do is try to adjust.
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