Rising Cost of Gas Puts Food Bills in the Pressure Cooker

By BRAD McELHINNY

High gas prices aren’t just hitting people in their gas tanks. They’re also hitting people in the grocery cart.

Grocers can’t help but pass along higher costs to consumers who buy the milk, eggs, cheese, apples and other items that come to the store by the tractor-trailer load, said Don Tate, the owner of the Fas-Chek supermarkets in the Charleston area.

Small deliveries from local suppliers are arriving at the grocery store with a $5 surcharge already tacked on, Tate said. Big deliveries shipped over the interstate can have a fuel charge of $60 or so per truckload, he said.

“That is added to the cost of your product,” he said.

“You talk to your suppliers, and they’re getting hit with fuel surcharges when the product comes from the manufacturer, from the warehouse,” he said. “It gets you in the cost of the product coming in. It gets you when it comes to your place of business.”

Take bananas, for instance.

Fas-Chek has been paying $12.85 a box.

Now, between the rising price of gasoline and the weakness of the American dollar, the price of a box of bananas is rising to $15 a box for Fas-Chek.

That means Tate will have to charge customers 59 cents a pound.

Up to now, the price had been 49 cents a pound.

It’s not like Tate hasn’t seen unfortunate upward trends before.

He’s selling milk at $3.39 a gallon. In his office is an advertisement from 42 years ago when the price was 59 cents a gallon.

Nationally, analysts are expecting no relief in sight.

This year, the Consumer Price Index for all food is expected to go up 3 to 4 percent, mostly because of higher energy prices being passed on to consumers.

The percentage that food costs went up was about the same last year, according to federal statistics.

Beef prices are 4.5 percent above this time last year. Pork prices are 1.4 percent above this time last year. And poultry prices are 6.3 percent higher than they were a year ago.

Egg prices surged 9 percent in December alone. That made the price of eggs 32.6 percent above the prior December, the highest swing ever recorded.

Milk prices actually went down slightly, 0.9 percent between November and December. But milk prices were up 13.4 percent overall from the prior year. Cheese prices were up 13 percent from the prior year.

Fresh vegetables went up 2.6 percent last month. The price of tomatoes accounted for most of that hike, increasing 11 percent. From the prior year, potato prices are up 3 percent and lettuce 4.8 percent.

“I think we’re in the midst of seeing a lot of items on their way up for various reasons,” said Steve Debord, who owns the Winfield IGA and Sixth Avenue IGA in St. Albans.

Debord feels the effects when delivery trucks pull up at his stores.

The smallest loads might come with a $5 gasoline surcharge, while the tractor-trailers can have fuel surcharges of up to $175 at his stores.

“That’s stuff that never was before,” he said. “They just started tacking them on recently to help pay for the price of gas. It’s like anything else. It has to be filtered down.”

Sometimes the small charges can add up and hurt worse than the big ones.

“I just picked up one item from a delivery service the other day that was $30. There was a $5 service fee,” Debord said.

“But if I’m looking at $180 for a tractor-trailer load of groceries, that’s not too bad. You’re looking at $10,000 in groceries in a tractor-trailer.”

He said grocers just swallow some of the extra cost. Other hikes go to the consumer.

“It is a little tough sometimes to determine what needs to be passed along and what you can absorb yourself,” he said. “Sometimes you do just absorb it yourself, just to save the customer. But you get to the point where you see your profit and loss statement that you think, I’m going to have to pass along some of this.”

At Fas-Chek, Tate sees the bright side.

He theorizes more people who live nearby are coming to his store because it costs too much to drive elsewhere.

“We’re finding that some consumers aren’t taking the 15- and 20- mile trips to the super box store,” he said. “They’re not taking the trip to the Wal-Marts. Our sales are up. Our customer counts are up, too.

“With the price of fuel, people are not running out. They figure if they go over to Corridor G or some of those areas, if it takes ‘em at least a gallon of gasoline, that’s $3-plus that they have used to make the trip.”

Nevertheless, the prices are hitting him, too.

He’s excited about the tax rebate announced last week by the federal government.

“I’m looking forward to my $600,” Tate said.

Contact staff writer Brad McElhinny at bradmc@dailymail.com or 348-5129.

Originally published by DAILY MAIL STAFF.

(c) 2008 Charleston Daily Mail. Provided by ProQuest Information and Learning. All rights Reserved.