Thursday, February 24, 2011

Latest Warning On Rising Food Costs

Rising Food Prices Lead to Wegmans Price Promise

BUFFALO, N.Y.- Spend just a few minutes in the grocery store checkout lane and it's clear--shoppers are going home with higher bills or less food in their carts.

Experts say food inflation is the highest it's been since 1975.

"The situation is bad, and it's going to be even worse," said Bert P. Flickinger III, an industry expert and Managing Director of Strategic Resource Group in New York City.

So what's a smart shopper to do?

Flickinger says if you have the storage space, stock up now.

"Buy an extra 2-3 months at a time on key categories," Flickinger said. Those include items such as cereal, soup, tuna, pasta, frozen food, orange juice, meats and poultry.

The major supermarkets in town want customers to do just that; both Tops Friendly Markets and Wegmans are trying to keep prices competitive through different strategies.

Sunday, Wegmans will officially announce a promise to keep prices fixed on forty food staples through the end of the year.

Most of those products will carry the "Wegmans" brand logo.

"Because we make them, we're in better control of controlling the costs," said Wegmans Spokesperson Theresa Jackson. "So even when commodity prices increase, or fuel costs increase, we're able to keep prices low on those forty items."
For example, Wegman's promises you'll see $.99 pasta and $1.99 cereals through the end of the year.
However, two staples you won't see are bread and milk.

The company says that's because dairy and wheat costs have been so volatile, it couldn't lock in those prices.

Meanwhile, a Tops spokeswoman says the company is using partnerships with national brands to offer sale prices on name brand products. There is also a core group of products that will always stay the same price, says spokeswoman Katie McKenna.

But no matter how you choose to save, experts say get used to it, at least for the next few years.
"We don't believe prices will correct and come down until the crop years of 2014 at the earliest," said Flickinger. "Maybe not even until crop years summer 2015."

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