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Grocery Prices
Old 11-28-2008, 03:49 PM   #1
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Grocery Prices

Several months ago prices at the grocery store rose quickly as fuel prices rose above the $4 mark. We were told that the main reason for the precipitous rise was that fuel prices rise for all of us, even grocery stores, and that they were just passing the costs on to the consumer. We bought this

Current local gasoline prices at the pump in our area are in the $1.70 range today however, I can see no appreciable decline in price at the grocery store to reflect this. Has anyone else noticed this phenomena?
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Old 11-28-2008, 04:04 PM   #2
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I visit 2 main grocery stores (HEB and Foodarama) and their regular prices have not gone down. If anything there may still be some prices still creeping upwards. The Walmart and FoodTown store isn't competitive enough to HEB and FAR. Only thing at Wallyworld cheaper is OTC drugs. FAR has some great deals in their weekly mail ads that keep me in that store. Though, I don't see as many 'deals" as I have in the past...
I believed once there is a reason, real or not, to raise prices such as Groceries. Stores don't want to let go of that easy money even if it costs less in gas/diesel these days.
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Old 11-28-2008, 04:48 PM   #3
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The supermarket that delivers my stock-up groceries didn't seen to have as many free delivery offers as they used to until last week's order. For some inexplicable reason, they gave me 10% off the entire order which pretty much covered the two turkeys and delivery fee. Two days later they sent a coupon for free delivery on the next order.
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Old 11-28-2008, 04:50 PM   #4
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Holiday markup (or failure to mark down) would be my guess.
i don't frequent the normal grocery stores. i've learned to shop in small batches if i am downtown anyway.
i use a local mom-n-pop meat market for meats. excellent quality and turnover and always 2 meat items on special every day. they divvy things up from 1 lb to 5 lbs, essentially the same price.
i use dollar type store for canned and dry goods and cleaning stuff.
i go to the regular supermarket for fresh veggies and seafood . i tried Aldi's and wallyworld for a while for veggies, but the quality and frig storage lifespan was markedly less.
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Old 11-28-2008, 04:56 PM   #5
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Two things happening. Prices are going up or producers are keeping the price the same and shrinking the amount in the package... or a combination of both.

Ever notice how the weight of a box is lower?
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Old 11-28-2008, 05:02 PM   #6
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Quote:
Originally Posted by freebird5825 View Post
Holiday markup (or failure to mark down) would be my guess.
i don't frequent the normal grocery stores. i've learned to shop in small batches if i am downtown anyway.
i use a local mom-n-pop meat market for meats. excellent quality and turnover and always 2 meat items on special every day. they divvy things up from 1 lb to 5 lbs, essentially the same price.
i use dollar type store for canned and dry goods and cleaning stuff.
i go to the regular supermarket for fresh veggies and seafood . i tried Aldi's and wallyworld for a while for veggies, but the quality and frig storage lifespan was markedly less.
A large percent of my spending is food; grocery stores and local farmers. I have ordered a custom cut turkey; am thinking of moving up to custom lamb, beef, goat cuts.
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Old 11-28-2008, 05:03 PM   #7
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Two things happening. Prices are going up or producers are keeping the price the same and shrinking the amount in the package... or a combination of both.

Ever notice how the weight of a box is lower
?
That's been going on since at least the '70s.
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Old 11-28-2008, 05:06 PM   #8
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That's been going on since at least the '70s.

Yes... and there is almost nothing in the box at all now days.
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Old 11-28-2008, 05:10 PM   #9
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I noticed my usual coffee brand did that this summer. Dropped the weight by a couple ounces.
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Old 11-28-2008, 05:11 PM   #10
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Two things happening. Prices are going up or producers are keeping the price the same and shrinking the amount in the package... or a combination of both.

Ever notice how the weight of a box is lower?
i just bought 2 sugars in a 4 lb bag at the dollar place. i didn't notice it until i put it up on my pantry shelf at eye level. what a ripoff.
i might even write to the company and complain. my mom used to do that if there was something wrong or missing and got lots of free replacement item coupons. she was a character.
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Old 11-28-2008, 06:42 PM   #11
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When commodities increase in price it doesn't always reflect in an immediate increase in the finished product. If you look at a price of crude oil prices vs. retail unleaded gasoline you can see that gasoline did not exactly match the increase in crude prices.




The way I read this chart, if gasoline had more closely matched the price of crude on the way up, we would have had gasoline as high as $7-8 a gallon.

I remember earlier this year that many of the big food producers were saying that they had not yet passed on the majority of their increased costs to the consumer. Even though prices had gone up, and package size had decreased, the increased commodity costs had not been completely accounted for. Just like gasoline prices did not drop as quickly as crude oil prices have in the last 5-6 months because refiners and vendors were trying to recoup some of their lost profits, I think that food producers are doing/will do the same.

There is probably a longer lag time involved because it takes longer to plant and grow wheat, and then turn it into Wheaties in a box at the Safeway than it does to take crude oil and make it into gasoline in the tanks at the local Exxon station. There are still a lot of very high input costs that have not worked their way through the system yet. When prices for fertilizer were going up like a skyrocket last year I bet a lot of farmers locked in prices. Nitrogen and Phosphorous are cheaper now, but they haven't fallen as much as crude oil has, and Farmer Brown still needs to make a profit on top of paying for that expensive fertilizer he bought months ago for this year's crop.

Since feed is such an important input in meat and poultry production, you won't see much reduction in pricing there until after the grain prices go down.

Demand plays a big part in the pricing as well. There has been a lot of demand destruction in gasoline, but I'm not sure that the same thing has happened in food. I would bet there has been some shifting around (eating at home vs. restaurants, or eating less expensive food, etc.), but I don't think it has been as dramatic as what we've seen in gasoline.

Some prices have fallen. One that caught my eye recently was the price of lobster. I saw lobster at $6 a pound in the store the other day and I now have plans for boiling some up this weekend because that's a darn good price.

Why did lobster get so cheap? Fuel to run the lobster boat is now a heck of a lot cheaper than it was 6 months ago would be my first bet. Other than that, nature takes care of all of the rest of the input costs. The lobsterman just has to go out there and herd them up, or whatever one does to catch lobsters. There is almost no refining/producing costs - just keep them alive in some water until they get to the local lobster shack or you buy some at the grocery store. Given the shape of a number of regional economies, and increasingly the national economy, I would also think that there has been a decrease in demand for luxury foods like lobster either at home or in the restaurants.

I don't expect that food prices will get any cheaper soon, and most of the items I buy at the grocery will probably continue to go up for at least the next 6 months - 1 year.
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Old 11-28-2008, 06:59 PM   #12
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i might even write to the company and complain. my mom used to do that if there was something wrong or missing and got lots of free replacement item coupons. she was a character.
My MIL does that at least weekly to sharpen her mind, her hand-eye coordination... and her tongue. She grumbles about the postage but she refuses to complain by e-mail-- she feels she owes the courtesy of a hand-written note.

You would think that the major retailers would share their complaints databases to weed out such consistently unhappy customers. But she gets an amazing number of coupons.
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Old 11-28-2008, 08:09 PM   #13
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I have noticed some decrease in food prices. Milk is definitely down from summer prices and eggs are down too. $2.30/gallon for skim milk, 99 cents/dozen large eggs, down from almost 2 bucks not that long ago. Just a couple of anecdotal examples I've seen (and I just happened to have a receipt sitting next to me). Those are a couple of foods that always have more volatile pricing though.
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Old 11-29-2008, 11:07 AM   #14
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She grumbles about the postage but she refuses to complain by e-mail--
One thing that I have noticed is that if you complain about a product via the website (basicly email) of the company involved, they will generally send you a coupon for a free issue of that item. I just complained to Chicken-of-the-Sea and expect to get one soon, also International Delight creamer.
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