Food prices, struggling

Consumers resist price increases

March 1, 2010

A brief Wall Street Journal article last week noted that food manufacturers are struggling to pass production costs on to consumers. For years, the WSJ reported, “retail food prices climbed between 2 percent and 3 percent annually, big enough to allow [food manufacturers] to pass along rising labor, packaging, and commodity costs.”

But in 2009, grocery-store prices rose just half of a percent, due largely to recession-strapped consumers buying the cheapest food available. (Remember 2008? That, said the WSJ, was when food-commodity prices shot up 6.4 percent, the fastest rate since 1990. ) As a result, the paper noted, “the cost of groceries is outpacing the cost of eating out.” Sorry, chef worshippers; restaurants aren’t suddenly cheaper than supermarkets. It just means that stores are raising their prices faster than eateries are.

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