Food inflation and coupon clipping
The price tag stopped Yvonne Smith in her tracks.
Grocery shoppers continued to grab items from the refrigerated cases around her, but Smith, a local Realtor, said she couldn’t take her eyes off the eggs during a recent shopping trip. She marveled that the Fort Wayne store was charging $1.69 for a dozen eggs – an item that cost less than 90 cents a few years ago.
“I think everything today is high,” Smith said. “You just wish they’d say stop.”
But grocery prices continue to soar, even in a faltering economy. Although food transportation and some ingredient costs have plunged, shoppers have yet to see that reflected on most store shelves.
Food and beverage prices climbed 5.9 percent during the 12-month period that ended last month, according to the consumer price index. The core inflation rate, which excludes volatile food and energy prices, rose 2 percent during the same period.
But food inflation is expected to slow next year, although grocery prices probably won’t drop, Purdue University agricultural economist Chris Hurt said. In 2009, grocery shoppers could see prices rise 2.5 percent to 3.5 percent. That estimate would be in line with a typical year, he said.
Food inflation flirted with 6 percent this year because food processors were coping with high fuel and ingredient prices, said Tom Elam, president of FarmEcon LLC. His Carmel-based agricultural consulting firm’s clients include turkey processors Butterball and Jennie O. Turkey Store.
It wasn’t that long ago that grocery shoppers would toss a box of Pop Tarts or a bag of potato chips in their cart without thinking twice about the cost.
Oh, how the times have changed.
The recession has encouraged many consumers to rethink how they buy food.
Bonnie Brown, a registered dietitian at Augusta Medical Center’s Nutrition Consultation Services, and other promoters of healthy eating are seeing an opportunity to teach families the less costly and healthier option to relying on convenience foods — prepare their own meals.
“A lot of people assume it costs more money to eat healthy,” says Brown, whose clients include people with chronic illnesses such as diabetes. “It actually can be a very inexpensive way to eat. You just need to learn some basic cooking skills, which a lot of people we see don’t have.”
Brown says not all processed food is unhealthy and expensive — but they’re often one or the other.
“Even orange juice is processed to an extent, because it’s pasteurized,” she says. “But often with convenience foods, a lot of fat and sodium is added to it. The manufacturer is trying to make it taste better in a way that’s cost effective for them.”
The key to avoiding prepared foods is learning how to cook and planning some meals, says Brown.
“Most of the time, people will say I don’t like to cook, or I don’t want to cook,” Brown says. “The reality is that they don’t know how. People also assume it’s going to take a lot more time, but there are many healthy meals you can make within 30 minutes.”
Stephanie Diehl, a food and nutrition specialist at the Virginia Extension Office and a registered dietitian, conducts classes on how to shop and cook on a small budget.
At a time when business-starved retailers are battling to lure customers with the lowest prices, coupons have the power to quickly push hesitant consumers off the couch and into the checkout line. So merchants, even many that are traditionally coupon-shy, are issuing more of them with the hope you’ll respond.
“Coupons (are) probably the best way to say, ‘We’ve got the best deal and we’re going to give you a bargain,’” said Mike Gatti, executive director of the Retail Advertising and Marketing Association, part of the National Retail Federation. “There are a lot more coupons floating around out there this year. Nobody’s hiding the fact that things are on sale.”
In an NRF survey of nearly 9,000 consumers this month, 44.6 percent said coupons influenced them to shop at a particular store – more than any other form of advertising. That’s up from 35.2 percent in 2007, when coupons were also the most influential form of promotion, above television and radio commercials, circulars and online ads.
Economic necessity has removed much of the stigma that many associated with coupons, said Matthew Tilley, co-chairman of the PMA’s Coupon Council and marketing director for CMS, Inc., a Winston-Salem company that processes coupons for payment.
“We have to admit there is this sort of thing in people’s heads that coupons are not cool to use,” he said. “But from a consumer’s point of view, that’s quickly erased when you realize there’s real money attached.”
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