Posts Tagged ‘food prices’
Thanksgiving 2008: Rising Food Prices, Shrinking Grocery Store Fronts
Wednesday, November 26th, 2008
Turkey, stuffing, pumpkin pie - all Thanksgiving staples, though this year they also collectively serve as a reflection of present economic conditions.
Nationwide, Thanksgiving food prices rose 6 percent from last year, according to the American Farm Bureau Federation. In addition, a meal for a family of ten this year will cost an average of $44.21, over $2 more than what it cost in 2007.
Consumers may wonder how, considering today’s lower gas prices, they are still ending up paying more for tomorrow’s meal – specifically, as much as $2.20 more for a 12-oz. package of brown-n-serve rolls and $3.12 more for three pounds of sweet potatoes.
Such increases, including the $1.46 more for a 16-lb. turkey, results from this year’s heavy fluctuation in both food and energy wholesale prices. According to the Bureau of Labor Statistics, food prices rose as high as 1.5 percent in June, when energy prices also rose 5.6 percent. Since then however, while oil prices have dropped drastically, food prices remained as high as they did during the summer.
“The pasta you bought in the store last weekend is based on wheat that was grown months ago – potentially as much as a year ago,” said Stewart Ramsey of IHS Global Insight to MSNBC. As for those turkeys, their prices reflect the high price of corn they were fed months ago.
As a result, consumers have been flocking toward smaller grocery stores and discounters like Save-A-Lot, to cut both time and money spent. Trader Joe’s, a chain of over 300 stores with an organic focus, also prides its ability to buy directly from suppliers, which they say results in lower prices for customers.
At the same time, grocers have also scaled back as much as they could. Even Wal-Mart, once known for their “supercenters,” focused its energies instead upon releasing smaller-scale “marketplaces.”
With the U.S. Department of Agriculture expecting food prices to continue increasing come 2009, many are expecting that the current food retail market will also carry over to next year.
“It’s safe to speculate that a lot of growth in the grocery business in the years ahead is going to be focused on these smaller stores,” said Bill Bishop, a food retail consultant at Willard Bishop Consulting, to the Associated Press.
Tags: American Farm Bureau Federation, Bureau of Labor Statistics, christina lee, food prices, Save-A-Lot Food Stores, Thanksgiving, Trader Joe's, U.S. Department of Agriculture, Wal-Mart
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Stronger U.S. Dollar, Dropping Gas Prices Amount to Little Growth for Costco
Thursday, November 6th, 2008
Costco Wholesale’s food sales led a slow growth in the United States this month, though they could not counteract declines in international and total company sales.
In the course of four weeks that ended Sunday, overall U.S. sales rose by 2 percent as international sales fell by 10 percent, summing to a one-percent decline in total company sales.
While other merchandise sales fell overall, food sales continued to rise due to wholesale price inflation. Since September, bakery sales rose by double-digit percentages, while fresh foods sales “continue[d] to be a bright spot in our business,” said Bob Nelson, Costco Wholesale’s head of investor and financial relations.
The company attributes most of the overall slowdown to a strengthened U.S. dollar and with that, weakness in the Canadian dollar, U.K. sterling, and Korean won. October’s drop in gasoline sales also negated the 2.5 percent increase the company saw in September.
In addition, while warehouses saw 2.5 percent more shoppers in October, non-food sales also dropped just as much. Due to price deflation, television sales fell even as the number of units sold continued to increase by 20 percent yearly.
“We believe this is most likely a result of the general status of the economy, and the effects that the current economic condition has on the consumers,” Nelson said.
Tags: Bob Nelson, christina lee, Costco Wholesale, food prices, gas prices
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