Get gas, grow your own and clip a little off the top
We start 2009 licking our collective wounds, and it has little to do with New Year’s celebrations or the Detroit Lions.
Michigan is an economic basket case, with nearly 1 in 10 residents out of work. While it is too soon to talk about Armageddon, once-comfortable suburbanites are starting to feel the pinch and making changes that for legions of Depression-era families was second nature.
They are growing their own food.
A typical family of four growing all its vegetables and using canned and frozen vegetables from the garden can save hundreds of dollars a year that otherwise would be spent at a grocery store or restaurant, said Sandy Ryan, spokeswoman for the United States Gardening Association.
As a gallon of gas skyrocketed past $4 last year, many consumers were not surprised to see food prices follow suit. But the recent plunge in gas prices has left some wondering why grocery bills have continued to climb.
Prices for commodities – such as corn, fuel and grains – soared through the summer, and American shoppers saw substantial food inflation for the first time in 17 years. The rate of increase has recently slowed, but food prices still haven’t fallen the way gas prices have. In fact, November food prices – the latest data available – were 6 percent higher than one year earlier, according to the U.S. Department of Agriculture.
“It was always more than fuel that impacted food prices,” said ShopRite spokeswoman Karen Meleta. “Food prices are commodities, and although some pricing has come down, they’re still higher than in the past.”
And while commodities soared in 2008 on a wave of unprecedented growth in emerging markets, the dollar fell considerably against other major currencies.
Even as gas prices drop, consumers are still getting slammed with high grocery bills.
Some local stores are promoting discounts as we enter a year in which the U.S. Department of Agriculture projects that food prices will increase 3.5 to 4.5 percent.
November food prices — the latest data available — were 6 percent higher than one year earlier. Grocery costs aren’t dropping along with fuel costs because food manufacturers generally lock in commodities contracts in advance.
“It was always more than fuel that impacted food prices,” said ShopRite spokeswoman Karen Meleta. “Food prices are commodities, and although some pricing has come down, they’re still higher than in the past.”
Although the recession has revived penny-pinching, Americans are still redeeming only 1 percent to 3 percent of paper coupons. In contrast, the nation’s largest traditional grocery chain says as many as half the coupons it sends regular customers do get used. Kroger’s part ownership of a data mining firm allows it to put the reams of information its shopper cards collect to use in more ways than other retailers do. And one way is to give shoppers coupons mainly for products they regularly buy.
Simon Hay, chief executive of dunnhumbyUSA, the data-mining and marketing operation Kroger co-owns with a London-based company, said targeting promotions becomes even more important in a recession.
“In a growing economy, you might get lucky because there is more money around,” he said. “But if there is less money around, the question is how can you be absolutely certain that you’ve got the right offers in the right places?”
Many retailers have loyalty cards and some offer “instant coupons” at checkout based on buyers’ habits. But dunnhumby — named for founders Clive Humby and Edwina Dunn, who are married — is about more than coupons. Kroger uses dunnhumby’s consumer analyses, which the data firm augments with customer interviews, to guide strategies for promotions, pricing, placement and even stocking variations from store to store.
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