Rising food costs change menu habits

Families staying home, eating leftovers, switching brands

By Alan Scher Zagier, Associated Press

Saturday, March 29, 2008

Photos By Dennis Schroeder / The Rocky

Ellen Swift frowns at the cost of her food as she goes through the checkout stand at the Wal-Mart in Stapleton on Friday. Higher fuel prices mean higher food prices at the market. "Everything is much, much higher," said Swift.

Leslie Shafer holds her daughter, Madison, 2, as she shops at the Wal-Mart in Stapleton. To save money, many families are eating more leftovers and buying more store-brand products.

Steadily rising food costs aren't just causing grocery shoppers to do a double take at the checkout line - they're also changing the very ways we feed our families.

The worst case of food inflation in nearly 20 years has more Americans giving up restaurant meals to eat at home. We're buying fewer luxury food items, eating more leftovers and buying more store brands instead of name-brand items.

Record-high energy, corn and wheat prices in the past year have led to sticker shock in the grocery aisles. At $1.32, the average price of a loaf of bread has increased 32 percent since January 2005. In the last year alone, the average price of a carton of eggs has increased almost 50 percent.

Ground beef, milk, chicken, apples, tomatoes, lettuce, coffee and orange juice are among the staples that cost more these days, according to the federal Bureau of Labor Statistics.

In Denver, food and beverage prices increased 4.5 percent in the second half of 2007, according to the most recent figures available from the bureau. The cost of flour in the western region has soared 39 percent in the past three years, while a gallon of whole milk increased 23 percent to $3.67.

Nationally, food prices rose nearly 5 percent in 2007, according to the U.S. Department of Agriculture. That means a pound of coffee, on average, cost 57 cents more at year's end than in 2006. A 12-ounce can of frozen, concentrated orange juice now averages $2.53 - a 67-cent increase in just two years.

And a carton of grade A, large eggs will set you back $2.17.

That's an increase of nearly $1 since February 2006.

"The economy is having a definite impact on shopper behavior," said Tim Hammonds, president and chief executive officer of the Food Marketing Institute, a retail trade group. "People are significantly changing what they do."

Soaring prices are causing shoppers to rethink long-held habits such as store loyalty.

For Peggy and David Valdez, of Houston, feeding their family of four means scouring grocer ads for the best prices, taking fewer trips as a way to save gas and simply buying less food.

"We do more selecting, looking around, seeing which prices are cheaper," said David Valdez.

Wal-Mart and other supercenters that sell food now account for 24 percent of the market, according to the most recent annual survey of shopping habits by Hammonds' organization.

Gina Pierson, a music teacher in Columbia, Mo., buys her family's staples at local grocery stores but makes regular trips to Wal-Mart to supplement the weekly shopping list. Like many families struggling to get by, Pierson and her husband, a public school teacher, are adjusting their approach to buying, cooking and eating food. Restaurant meals are now almost a luxury.

"Between food and gas, it's just cheaper to stay home," she said.

Bills steadily climb

In 2007, the FMI survey showed the average number of weekly shopping trips falling below two per household for the first time.

Paula Curtis, a mental health worker in Montpelier, Vt., said her grocery bill has been steadily climbing by $10 to $20 a week.

She has cut back on meat, fruit, vegetables and snack food, and buys milk at the gas station, where she said it's cheaper.

"Every time I go, it's more and more," she said. "I make a list, but I don't necessarily get everything on it because I can't afford everything." Nationwide, a family of four on a moderate-cost shopping plan spends an average of $904 each month for groceries, an $80 increase from two years ago, according to the USDA.

Outside help

Those who can't absorb the added expenses are increasingly seeking help from food pantries. America's Harvest, which distributes nearly 2 billion pounds of food and grocery products each year to more than 200 food banks across the country, estimates that its overall client load increased by 20 percent in the fourth quarter of 2007.

The jump has been even higher at the Central Missouri Food Bank's pantry in Columbia, a college town halfway between Kansas City and St. Louis.

The food pantry served 7,200 people in 2007, an increase of more than 50 percent over two years, said Executive Director Peggy Kirkpatrick.

Columbia used to be considered inflation-proof because of its high-paying university jobs and proximity to the state capital, 30 miles away in Jefferson City.

"That's not the case anymore," she said.

More salads

Shary Auer visits the Columbia food pantry once a month to help extend the family's $800 monthly food budget. The mother of five children, ages 9 to 19, is buying more canned food instead of fresh produce. Portions are smaller around the Auer dinner table, and salads are added regularly to stretch the servings of meat and poultry.

"I watch for sales, save my receipts and highlight what I save," she said.

Not all shoppers are struggling with the changes. At the Whole Foods Market in downtown Seattle, Beth Miller didn't think twice about paying $6.39 for a gallon of organic orange juice, or $4 for a dozen eggs at the store, which specializes in organic and natural foods.

"I'm used to having a small gasp at the cash register," said Miller, who favors local produce and organic food for her husband and 12-year-old son.

Among retailers, the surge in commodity prices - from corn, now in high demand because of increased ethanol production, to wheat that has tripled in price in the past 10 months - has some industry observers suggesting that higher food prices aren't a temporary fluctuation but instead may be here to stay.

"We don't exactly have a crystal ball," said Whole Foods' Perry Abbenante, a senior global grocery buyer. "But I'm not sure (prices) are going back. We're preparing for a new threshold."

Prices up 5 percent in 2007

National average prices for common foods:

$2.17

* Price of carton of Grade A large eggs, up nearly $1 in two years.

$2.53

* Price of 12-ounce can of frozen concentrated orange juice, up 67 cents in two years.

$1.32

* Average price of a loaf of bread, up 32% since January 2005.

In Denver

* Food and beverage prices up 4.5 percent in second half of 2007

* Price of gallon of whole milk, up 23 percent to $3.67