By AARON SANBORN [email protected] Article Date: Saturday, December 15, 2007
Consumers are feeling the pinch this holiday season with ever increasing food prices. John Huff/ Staff photographer * Order a print of this photo
DOVER — Niki Lilly of South Berwick, Maine, says her family was once a middle-class family that could buy the groceries they wanted when, and where, they wanted.
But rising grocery prices, a decreasing income and increases in the cost of living have changed the way Lilly buys and eats, and she'll be the first to admit the change is taking its toll.
"We were a middle-class family, now closer to middle poor," she said. "We can't eat as healthy as we did due to prices and we are not the only ones. But then, who wants to say, 'We don't have the money we used to have.'"
In the past month, Lilly, 56, has had to ask her daughter and grandchildren from Arizona not to come visit.
"Because of heating costs, I can't put the house at 70 degrees, plus I can't feed them," she said.
As for many area residents, a stagnant or declining income is compounding her hardships. Shoulder problems prevent her from working, leaving her husband's job as the sole source of income; and that means an already thinly-spread supper is shrinking even further.
"Food prices are high and you try to prepare a balanced dinner, but it's extremely hard when you want to buy good vegetables but can't afford them," she said.
Around the country, the overall price of groceries has gone up 4 percent from this time last year and projections show that increase will hit 4.5 percent by the end of the year. Dairy products have seen the largest increase at 12.8 percent, according to the U.S. Department of Agriculture.
Other notable increases include cereal and baking products at 4.7 percent, meat and poultry at 4.8 percent, fresh fruits at 2.4 percent and fresh vegetables at 3.7 percent.
John Dumais, president and CEO of the New Hampshire Grocers Association, said there's no doubt grocery prices are increasing at a high rate, but says rising prices are tied to the cost of energy. Transport trucks need gas. Processing plants and markets alike need energy for refrigeration and heating, and it all costs more these days.
"It's getting pretty pricey and it starts with petroleum," Dumais said. "We're very dependent on the price of petroleum in our industry and that cost is substantial."
The main reason for the industry's dependence on petroleum is because 95 percent of food products are shipped by tractor-trailer, and food prices reflect those shipping costs, Dumais said.
Another factor is the industry's slim profit margin in what is considered a competitive industry.
"For every $1 of sales, we obtain 1 penny," he said. "That's not a lot of profit when you're dealing with the rising cost of energy, so the price of groceries must go up. That's our quandary."
Products seeing the biggest increases are the ones that get rotated out of sales at quicker rate such as meats, produce, deli meats, poultry and dairy products.
"When you change your inventory as often as they do, there's more potential for the price to go up," Dumais said.
Prices on frozen foods and canned goods aren't affected as much.
With dairy products like milk and eggs, factors include the cost of feed — mostly corn and soy — for animals that produce the products and gas to transport the product for processing.
Another factor in increased prices is international demand. Countries like China are buying more meat, eggs and other foods, driving up prices around the world, according to the USDA.
As a net result, those increases are forcing area residents to change their buying habits. Some shared their cost-saving strategies in a Foster's web poll about the issue.
"I've gotten used to eating smaller portions. Although making homemade vegetable soups and salads has become expensive, I do try to include one or the other nearly every evening meal," said Janet Thompson of Kittery, Maine. "I've eliminated desserts altogether, as well as chips, cookies and other non-nutritious snacks. I'm buying more fruit and less fruit juice. Overall, I am purchasing more whole, unprocessed foods and staying away from prepared or processed foods. I believe I am healthier for these changes, as well as saving money at the grocery store."
Lisa Dexter, of Middleton, says she relies on older recipes to make cheap dishes.
"I am budgeting every meal to see how many nights I can get out of it," she said. "Using coupons, not buying the most expensive foods has helped. Using old recipes from my Memere' and mother of what they used to eat seem to help. Their recipes from the '50s have usually a few ingredients that are inexpensive."
Coupons are also a tool Lilly uses. She said she'll use coupons regardless of whether it's a product she favors.
"If it's on sale and I have a coupon, I'll probably get it," Lilly said. "I'm looking for the cheapest buy."
Dumais said prices will continue to rise slightly before they go down, but dairy products should come down within the next year. He said he expects the industry to explore several strategies to reduce prices.
"The food industry for most of its life has always looked for ways to streamline the system and be more efficient in what they do," Dumais said. "Most stores try not to overbuy and other stores are trying to be more environment-friendly and cut energy usage."
Electricity cost is a large expense for grocery stores and if they can cut that cost, they can cut costs elsewhere, including prices, said Dumais.
"I don't see any short-term relief," Dumais said. "In the future, these energy-saving strategies will minimize increases for consumers."
