The High Cost of Raising Prices

[CardsFan]

Estate taxes maybe? It is God's waiting room.

Glad you said it. This was my first thought also.

 

[John Galt III]

Another way we see higher prices without the price actually rising is when the makers shrink the package size. In the last 6 or 7 years, I have seen the number of cookies in a Keebler's package of chocolate chip cookies get reduced twice. The first time they redid the package from 30 cookies to 27 cookies. Then, a few years later they reduced it from 27 cookies to 24 cookies. That's a 20% reduction, taken together. Without raising the price of the package itself, the regular price in my local supermarket is now well over $4 a pound, and I stopped buying it unless I can find it on sale for under $4 a pound. With my diabetes, I eat very few cookies in one sitting compared to a few years ago before I was diagnosed.


Potato chips is another item whose regular price is now well over $4 a pound, even when on sale. And like cookies, the package size varies a lot so you have to watch the unit pricing stickers on the store shelves.

Agree. Pretzels are way up too. But !!!! I have found a place that sells great salty pretzels for $1 for a 12 ounce bag, which is about $1.33 per pound. Not bad! All the other stores are charging around $3 or $4 a pound for the same kind of pretzels. Unbelievable.

 

[Blue Collar Guy]

Estate taxes maybe? It is God's waiting room.

.

 

[Scuba]

I found it really cut down on my restaurant costs to not only avoid alcoholic drinks, but also to just have water with my meal instead of diet Coke. Restaurants seem to make a lot of money on whatever they serve you to drink. Even diet Coke seems to cost $2-$3 at most inexpensive restaurants and it is just not worth it to me.

Yes, sometimes we go out and just have water or iced tea. We find it cuts our typical bill by half. However we do enjoy wine with our food and sometimes enjoy a pre-dinner craft cocktail so we haven't given it up. If our budget gets tight, we'd probably just go out less frequently.

 

[Scuba]

That is a certainly a lot for state & local, presumably you enjoyed a higher income to help make up the difference. Most of the income tax free states we've looked into make it up on property tax, personal property tax (cars & boats) and or sales tax. And some add impact fees just for the privilege of moving to their fine state...

+1
We did quite a bit of research on moving from CA to TX or FL or NV several years ago. While real estate is much less expensive than CA per sq ft, we found that the types of homes we liked in TX and FL were much larger than where we live in CA and therefore were not as much of a cost savings as we had thought. Plus TX & FL both have pretty high property and sales taxes. While still less expensive than CA, the actual savings we could get were a lot smaller than we had thought so we decided it wasn't worth leaving friends and the place we really love living to save a few thousand per year.

NV truly was much lower COL because of the casino revenue and the tax revenue they generate. NV has low property taxes and much lower real estate prices than CA. Alas, we decided it was too far from the ocean and too cold in the winter for us.

YMMV but the point is all taxes and COL elements must be considered, not only state income tax rates.

 

[braumeister]

Estate taxes maybe? It is God's waiting room.

No estate tax in Florida AFAIK.

 

[iloveyoga]

Every time I cook at home I calculate how much the same meal would cost if we went out to eat. We do go out to local restaurants, mostly at lunch time and I like to look for the daily specials.

 

[ChiliPepr]

There is a limit as to how much I will spend for glass of wine, even at happy hour prices.

... at happy hour, one might find a $7 glass in my area. It's to bad really, HH has become so expensive that I don't go as often.

In So Cal even happy hour won't see wine glasses priced that low.

Glasses of wine are typically $8-10 around here; $6.00-$7.00 at Happy Hour.

... happy hour prices are less.

What is this "Happy Hour" you all speak of? That is one thing we miss out living in Massachusetts!

 

[marko]

What is this "Happy Hour" you all speak of? That is one thing we miss out living in Massachusetts!

A bartneder once told me that Massachusetts is where Happy goes to die.

 

[Ready]

I lived in the Boston area until 1989 and I remember when the happy hour ban passed in 1984. It was based on a belief that offering cheap drinks encourages more drunk driving. It's amazing that the law has been in effect all of these years.

I thought the bars and restaurants responded by offering happy hour discounts on appetizers to encourage more traffic volume during the non-peak hours. But cheap food probably never had quite the same appeal as cheap booze.

I actually didn't mind the ban so much because we could go to the Ground Round and get a big plate of buffalo wings for half price. Beer was still pretty inexpensive back then so it was still a great deal.

 

[Nemo2]

I lived in the Boston area until 1989 and I remember when the happy hour ban passed in 1984. It was based on a belief that offering cheap drinks encourages more drunk driving. It's amazing that the law has been in effect all of these years.

Until the mid 1960s, in Melbourne, Australia, the "Six O'Clock Swill" was in effect, as patrons downed as much beer as they could before closing time. The intention of the early closing law was, AFAIK, to "Get guys home to their families for dinner"...yup, they got home....drunk for the most part.

 

[Chuckanut]

What is this "Happy Hour" you all speak of? That is one thing we miss out living in Massachusetts!

Happy Hour ain't what it used to be. I used to be able to get a seat in the bar area of a favorite restaurant, and for the price of a glass of wine have a variety of small treats to munch on - pizza slice, small BBQ chicken legs, cheese spreads, salad, veggies, and sometimes even a bit of dessert. All for under $10. Often well under $10. It kept the restaurant active and took in some cash during the slow pre dinner hours.

Today, HH has morphed into a costly expensive monster with more expensive wine, no free treats, and can easily hit $15 a person, more if you are hungry or want another glass of wine. Cheaper than a full dinner, yes. But not a good value. The owner may be Happy but I am not

Sometimes I can order off the dinner menu, split a plate with an attractive lady friend and actually get out for less than HH prices. !?!?!?!

 

[Dash man]

Thank you. I definitely will, Im just at a loss as to how Florida supports itself

High property taxes. All the tourism businesses are highly taxed such as hotels and rental cars. Lots of toll roads.

 

[Scuba]

Happy Hour ain't what it used to be. I used to be able to get a seat in the bar area of a favorite restaurant, and for the price of a glass of wine have a variety of small treats to munch on - pizza slice, small BBQ chicken legs, cheese spreads, salad, veggies, and sometimes even a bit of dessert. All for under $10. Often well under $10. It kept the restaurant active and took in some cash during the slow pre dinner hours.

Today, HH has morphed into a costly expensive monster with more expensive wine, no free treats, and can easily hit $15 a person, more if you are hungry or want another glass of wine. Cheaper than a full dinner, yes. But not a good value. The owner may be Happy but I am not

Sometimes I can order off the dinner menu, split a plate with an attractive lady friend and actually get out for less than HH prices. !?!?!?!

I agree! DH & I were excited about being able to try some happy hours once we RE'd. We've now stopped going. Craft cocktails are almost never discounted. Choice of drinks is typically limited to well cocktails, house wine, or beer. And most of the happy hour food deals are only for fried or starchy items. The deals are just a few bucks off, not half price generally speaking. It doesn't seem worth it to eat food and drink alcohol we wouldn't otherwise order. The other issue is having to go out so early. We usually prefer to eat between 7-8:30 pm, after happy hour is over. We decided we'd rather pay full price and order what we want and eat when we want.

 

[Blue Collar Guy]

Every time I cook at home I calculate how much the same meal would cost if we went out to eat. We do go out to local restaurants, mostly at lunch time and I like to look for the daily specials.

Since we have started (last 5 years) not going out to eat, I sometimes do this. I find that it takes he edge off of not going out. Im trying to find the silver lining in the whole situation. In my old live when I was bring home 50K ,I budgeted 200 a week in going out. Not a real budget but thats what I spent on average. Now its maybe 40 a week, and thats only because I take the kids out for Fathers day dinner or some other holiday(Their Birthdays) and spend large amounts during those 2 or 3 times.

 

[Nemo2]

Well in Seattle, the city council wants everybody to make a minimum of $15/hr. So that means that the least skilled workers get $15, and a skilled cook or mix-master type bartender will get more. It is just impossible for a restaurant to stay in business for any time without high average tickets as even rents are being pushed up by the replacement of older commercial property that might have held restaurants by new building which is mainly apartments,

At least around here, the days of funky and cheap but good restaurants seem to be gone.

Ha

The same thing is happening in Ontario:

https://www.theglobeandmail.com/opinion/minimum-wages-the-small-town-view/article35844309/

It’s the young and low-skilled workers who will be priced out of the market. “The loss of training opportunities caused by minimum-wage legislation is especially problematic,” the authors say. They also point out that the higher the minimum wage is compared with the median wage, the greater the “disemployment effect.” This is a real problem in the Atlantic provinces, where minimum wages are increasing rapidly, even though median wages are among the lowest in the country. Many mainstream economists point out that the income losses from raising the minimum wage are often underestimated.

The only thing surprising, (or perhaps not, considering who is involved), is that this outcome wasn't, and still isn't in too many instances, glaringly obvious.

 

[marko]

Happy Hour ain't what it used to be. I used to be able to get a seat in the bar area of a favorite restaurant, and for the price of a glass of wine have a variety of small treats to munch on - pizza slice, small BBQ chicken legs, cheese spreads, salad, veggies, and sometimes even a bit of dessert. All for under $10. Often well under $10. It kept the restaurant active and took in some cash during the slow pre dinner hours.

We winter in Fort Lauderdale. Sitting at a nice place, overlooking the water you can get a pretty good, filling, HH meal (maybe a combo of prime rib sliders, chicken wings, shrimp poppers), 2 Martinis/Wine and desert for about $14 each.

We don't deliberately seek these places out but sometimes we want an early dinner (before 7) and often just fall into HH. Same meal on the dinner menu might run $40 each.

 

[Chuckanut]

Well in Seattle, the city council wants everybody to make a minimum of $15/hr. So that means that the least skilled workers get $15, and a skilled cook or mix-master type bartender will get more. It is just impossible for a restaurant to stay in business for any time without high average tickets as even rents are being pushed up by the replacement of older commercial property that might have held restaurants by new building which is mainly apartments,

At least around here, the days of funky and cheap but good restaurants seem to be gone.

Ha

Given the huge increase in housing prices in the Seattle area I would think that the people who work in the restaurants - servers, cooks, table bussers and more can no longer to afford to there.

Eventually, Seattle will run out of people willing to live in far away smaller cities, and drive 40-70 miles a day for what is a lower paid job. Eventually Seattle will run out of people willing to make the morning latté that everybody there enjoys. THE HORROR OF IT!

 

[Blue Collar Guy]

In my old life, I had occasion to be invited(many times uninvited and unwanted, but entry was made anyway) into peoples homes and apts. Many times entering a 1 or 2 bedroom apt had 8 or 10 people living in there. It was like an army barracks, except usually very dirty. Divide a 3000 rent by 8 guys that are dishwashers, its not big money. This is how they do it. I went to high end Manhattan apts that had 10 girls living in it, they did 12 hour shifts in nail salons.

 

[Sojourner]

Since we have started (last 5 years) not going out to eat, I sometimes do this. I find that it takes he edge off of not going out. Im trying to find the silver lining in the whole situation. In my old live when I was bring home 50K ,I budgeted 200 a week in going out. Not a real budget but thats what I spent on average. Now its maybe 40 a week, and thats only because I take the kids out for Fathers day dinner or some other holiday(Their Birthdays) and spend large amounts during those 2 or 3 times.

Did you mean "$200 a month" and "$40 a month"? Cause $200/week for your dining-out budget would've worked out to $10,000/year, and I doubt you spent that much just eating out at restaurants when you were earning $50K/year.... or did you?

 

[Blue Collar Guy]

Did you mean "$200 a month" and "$40 a month"? Cause $200/week for your dining-out budget would've worked out to $10,000/year, and I doubt you spent that much just eating out at restaurants when you were earning $50K/year.... or did you?

From 2003-2008, it was about $200 a week. now its $40. I was going to retire in '03. thats when we started living "large" with the 10k in restaurants we were at about 30k a year in spending. we were still renters. Pre 2003 i wasnt bringing home 50k. No car for 8 years prior, going out was baked clams and a pizza, with a pitcher of soda I think it was $25 with the tip. Had fun, but glad those days are over.
Im getting depressed thinking about this now, but in the old apt, if i put the mail on the kitchen table the whole place looked messy, it was that small.

 

[Nemo2]

in the old apt, if i put the mail on the kitchen table the whole place looked messy, it was that small.

Ralph? Ralph Kramden? Is that you?

 

[Blue Collar Guy]

Ralph? Ralph Kramden? Is that you?

His apt was bigger.

 

[SonofCohoes]

I totally agree with you. But in my state,my property tax is $6300, my sales tax is 8.875 %. My water and sewer is 2 thousand bucks.

We're upstate from you a few hundred miles and we're paying over 6k a year in property taxes on a 3 bedroom townhouse.

 

[Blue Collar Guy]

We're upstate from you a few hundred miles and we're paying over 6k a year in property taxes on a 3 bedroom townhouse.

This place is getting to be a real killer, even upstate I see.