Stagnito Media Convenienece Store News Convenienece Store News Single Store Owner Progressive Grocer The Gourmet Retailer Progressive Grocer Store Brands Retail Leader hispanic
 
Mar 17, 2011

Food Prices Make Biggest Jump in 36 Years

PrintFood Prices Make Biggest Jump in 36 Years  

CHICAGO -- Wholesale food prices spiked 3.9 percent in February from January, the biggest jump in 36 years, the Chicago Sun-Times reported, citing the U.S. Labor Department.

Most of the increase was because of a sharp rise in vegetable costs, although meat and dairy prices also jumped. Harsh winter freezes in Florida, Texas and other Southern states damaged crops, driving up vegetable prices. Meanwhile global prices for corn, wheat and soybeans have risen sharply in the past year. That has raised the price of animal feed, pushing up the cost of eggs, beef and milk at the wholesale and consumer level, according to the report.

Corn prices are up 59.4 percent from last year. Wheat is up 81 percent, and soybeans are up 29 percent, said Ephraim Leibtag, deputy director for research at the U.S. Department of Agriculture's Economic Research Service.

The USDA forecast projects consumer food prices will rise 3 to 4 percent this year.

The wholesale price report comes ahead of a Labor Department report on consumer prices, due out today, forecast to show overall prices rising 0.4 percent in February. The January report showed sharply higher year-over-year price increases for several foods, including citrus fruit, up 10.6 percent; pork, up 9.9 percent; ground beef, up 9.9 percent; coffee, up 4.9 percent and potatoes, up 5.9 percent.

Those increases preceded the recent run-up in oil prices that drove gas prices higher amid unrest in Egypt and Libya. The higher energy costs will also affect grocery prices, Leibtag said.

"We have seen higher oil prices. Not all of that has come through yet. There's still more to come," Leibtag said of grocery price increases.

Brian Todd, president of the nonprofit Food Institute, told the newspaper that whether the higher gas prices will translate into even higher grocery prices for consumers will depend on how long the spike in gas prices lasts. Retailers have focused on cost-cutting and are concerned about passing price increases on to consumers, he noted.

"They are very cognizant of the fact that consumers are very budget conscious and they have many options to take their business to alternative retailers -- their competitors," he said. "That plays a major role in them holding increases to a minimum level or not passing them on at all."

Still, the higher wholesale prices are bringing visible changes. Wendy's, which is paying higher prices for tomatoes, now puts them on hamburgers only by request. Starbucks and Dunkin' Donuts have raised prices because they're paying more for coffee beans, the report said.

 








Find Reports & Data

CSNews' 2011 Realities of the Aisle Consumer Study

Consumers are shopping convenience stores slightly more often than they were a year ago, but the nation’s economic doldrums continue to be a drag on spending, according to Convenience Store News’ annual consumer study – Realities of the Aisle 2011.

CSNEWS 2011 Foodservice Study

After reporting a 6.1-percent sales increase in 2010, convenience store retailers expect to generate increased sales and profits from their foodservice operations this year.

CSNews' 2011 Industry Report Study

The convenience store industry had a good year last year. The 13.5 percent total industrywide sales increase was a big improvement over the more than 20-percentage point drop in 2009.

CSNews 2011 New Products Scorecard

The success rates for new items introduced to the convenience store industry last year were down in all seven major product categories tracked in the Convenience Store News New Product Scorecard, but retailers nevertheless increased the number of new items on their shelves and increasingly relied on store associates to make consumers aware of those products.

CSNews 2011 Industry Forecast Study

Although the recession is officially over, consumers in the U.S. remain “mad as hell” and “frustrated” by the slow pace of recovery.



SUBSCRIBE TO E-NEWSLETTER SUBSCRIBE TO E-NEWSLETTER


Today's New Product


Insulated Beverage Dispensers
These stainless-steel insulated beverage dispensers provide greater performance and durability in the coffee, tea and beverage category, the manufacturer stated.
Featured Videos

Loading...
Playlist

View more


Related Videos
Professional Network


Stagnito Media
570 Lake Cook Rd, Suite 310
Deerfield IL 60015
Ph: 224-632-8200
Fax: 224-632-8266

Privacy Policy
Print / Electronic Media
Convenience Store News
CSNews for the Single Store Owner
Progressive Grocer
Progressive Grocer's Store Brands
The Gourmet Retailer
Retail Leader
Marketing Guidebook
Directory of Convenience Stores
Events
Hispanic Retail 360

Custom Media