Leaving Weis Markets in Parkville, Anita Carpenter rattled off the growing list of food she’s cut back on: meat, cheese, fruit, lunch meat, fresh vegetables, fruit juice.
“I just can’t do them any more,” said Carpenter, a 71-year-old retiree on Social Security. “I buy the frozen dinners. You spend almost $50 on just, like, 15 items. It shouldn’t cost that much. … It’s getting to where you just can’t afford to go grocery shopping.”
Instead of shopping once a week, the Parkville resident limits supermarket trips to once every two to three weeks. She shops around at Weis and two other stores. Still, a grocery trip that once cost about $60 now costs $80 to $95 on average.
“I look for sales. You have to,” Carpenter said. “When you have a car payment and a house payment, the last thing you can afford money on is food. … You have to decide what’s more important than something else, and that’s a hard thing to do.”
With inflation soaring, consumers in the Baltimore area and elsewhere have encountered sharply rising prices on food, gas and other daily necessities.
Food price hikes have been especially acute in recent months. In May, prices of food purchased at supermarkets jumped nearly 12% compared with May 2021, the largest 12-month increase since April 1979, the government’s Consumer Price Index report showed. Prices for food people buy at grocery and other food stores are likely to rise as much as 8% this year, outpacing hikes of 3.5% in the previous two years, according to a U.S. Department of Agriculture outlook.
Analysts blame pandemic-related demand swings, ongoing supply chain issues and the war in Ukraine for rising freight costs and supply shortfalls. A shortage of cooking oils, such as sunflower and palm oils, used in everything from snack food to shampoos, worsened because of the war, bad weather and a recent export ban in Indonesia, a major palm oil producer. And freight costs have jumped, driven by rising fuel prices, pandemic-related disruptions and labor shortages.
“Inflation is hitting hardest in less discretionary categories, such as groceries and gasoline,” said Neil Saunders, managing director of GlobalData. “It means that inflation is highly visible to consumers, who see elevated prices on the shelf edge at supermarkets and at the pumps. It makes inflation very hard to avoid, as cutting volumes of these goods is challenging.”
Inflation hasn’t had a “catastrophic” effect on the consumer economy because some households have high savings and cut back on travel during the pandemic. But it’s hurting those on the bottom and middle of the income spectrum, and behaviors are shifting, he said.
After contracting during the pandemic, consumer credit and debt is expanding again. Impulse buying, especially online, is decreasing, along with the volumes of products purchased, especially in discretionary categories. Shoppers are switching where and what they buy, trading down to cheaper stores and brands and cutting out nonessentials.
“I’m just buying a little less, buying when I need the items, but not as much of it,” said Doris Brown, stopping at Food Lion in Perry Hall on her way home from work as a caregiver. “Normally, I would purchase more. Now, I’m purchasing a little at a time. Something for the grill today and maybe leftovers for tomorrow.”
And it’s not only groceries, she said: “I’m cutting back on everything.”
Imani Rhodes looked for deals online before heading to Giant in Hampden on a recent Friday for soda and iced tea she needed for a weekend family get-together.
“Prices definitely have gone up on everything. It’s not just one particular item,” said Rhodes, a 29-year-old interior decorator from Reservoir Hill. “It makes you question, ‘Do I really want this or do I not want this?'”
For Sara Vargas, a Pikesville stay-at-home mother of a toddler, rising prices have made meal planning a challenge. Though she works a summer job, her husband works two jobs and the family gets food stamp assistance, money for food just doesn’t go as far anymore.
She’s noticed big jumps in the cost of milk and eggs. Her daughter’s kosher school has a strict food policy for bringing lunch, complicating her grocery planning. Egg salad is permitted, but with egg prices up, Vargas has switched to prepared egg salad as a less costly way to “make it stretch.”
She also buys lunch meat at the deli less often, even though it’s her 3-year-old daughter’s favorite. And while she’s trying to eat healthy foods such as salads, fresh vegetables are pricey, too, she said. A mobile app that aggregates supermarket flyers helps her compare prices store by store, at places such as Wegmans, Shop Rite and Costco.
“We are trying the best we can to only shop when we need to, and buying and sticking to a shopping list is definitely key,” said Vargas, 35.
Consumers have come to expect to pay certain amounts for food products, giving them price reference points in the grocery store and elsewhere, and during inflationary times, sticker shock inevitably sets in, said P.K. Kannan, dean’s chair in marketing science at the University of Maryland’s Robert Smith School of Business.
“That gets ‘encoded’ as a loss, and sometimes these losses that you feel can really play a big role in how you will react,” Kannan said.
Consumers are likely to feel the “loss” of a price hike more acutely than the “gain” of a discount, behavioral economists say. And, Kannan said, they tend to respond by changing habits, limiting impulse buying, comparing prices among multiple stores, buying vegetables at one place and packaged goods at another, or buying in bulk.
“They are trying to reduce the total amount of spending on food and other things,” he said. But “given that prices are rising all over, they may not be able to do that very well.”
Consumers may grow accustomed to higher prices, especially if incomes increase too, Kannan said.
“If your increase in pay somehow cushions this, then you may not change as much and you may take that in stride,” he said.
Or, they may discover new experiences that permanently alter their shopping patterns, he said.
Manufacturers that explain price increases as a result of factors such as higher shipping and raw materials costs might be better at retaining customers and market share, Kannan said.
“Being transparent about the reasons for the price increase may get them some Brownie points from consumers,” he said. “They don’t want to be seen as a manufacturer who is price gouging.”
Bel Air resident Mike Walker does his family’s grocery shopping and closely tracks prices. He believes price hikes are much more noticeable now than during pandemic lockdowns and shortages, and he’s found himself paying more attention to quantity. Lower prices, he’s found, sometimes also mean smaller packaging sizes.
“Across the board, I’ve noticed everything costs more,” said Walker, 53, who works for the Army. “And you can feel it. I’m just trying to control it as much as I can.”
Several of the region’s biggest grocers declined to comment on rising prices, including Giant and Safeway. But a trade group for food retailers and producers says costs have increased at every stage of the food supply chain during the pandemic because of a sudden shift to increased eating at home, producers’ loss of demand from the food service industry and grocers’ increased operating costs to adapt to COVID-19 protocols.
With Russia’s February invasion of Ukraine, raw materials and finished goods costs are being driven higher “at a time when supply chains continue to face impacts from the pandemic and Americans are already experiencing significant inflation,” FMI – The Food Industry Association says on its website.
Amid rising prices, Weis Markets is seeing increased use of its gas rewards program, offering 10 cents off a gallon for every $100 spent with the store club card, said Dennis Curtin, a spokesman. It is promoting and heavily investing in its “low low price” program, which covers private brand and brand name products, produce and frozen food.
And the chain has seen more shoppers buying store brand products, switching from beef to pork and poultry and, to reduce gas costs, making fewer shopping trips with larger orders, he said. Sales of canned goods have increased as well, possibly as shoppers look to economize.
At MOM’s Organic Market in Hampden, shoppers look to save money by bringing containers and buying products such as organic laundry soap, spices, granola, grains, sugars, honey, vinegar and olive oil in bulk, said Scott Carberry, the store operations manager.
Analysts say inflation is affecting consumers differently depending on their income levels. Middle-class consumers haven’t fully cut back because of a strong job market, but are joining warehouse clubs such as Costco and Sam’s Club in even greater numbers than during the pandemic, said Jahronne Martis, director of consumer research for Refinitiv, which tracks financial market data. High-end earners, meanwhile, are still spending freely, she said.
“But the low-end consumer is definitely already holding back,” she said. “They’re cutting back on some of the things they can’t afford.”
In the Baltimore area, residents of low-income neighborhoods with limited grocery store options have struggled, said Saray Israel, head of nonprofit Prime Time 4 Unity. Inflation has made it more difficult to collect and distribute food to people in need in West Baltimore and serve elderly residents in their homes, she said. Donations she depended on from organizations have decreased, Israel said, especially as COVID-19-related grants have run out.
At food distribution sites, “the lines are getting longer and longer,” she said. “It’s a struggle because people’s food stamps are not lasting as long as they used to now.”
Martis said most of the dozens of retailers that Refinitiv tracks have warned of higher costs and continuing supply chain challenges. Most blamed supply chain issues and inflation for low profits and high costs in the first quarter. With fuel and transportation costs continuing to rise, consumer prices likely will too, Martis said.
Kim Donnelly, a 40-year old bus driver for Baltimore County Public Schools, has resigned herself to just paying more. The mother of two children, ages 8 and 11, said inflation has boosted her weekly bill from about $100 to $120 a week to as much as $170.
“Everything is more expensive. Every single thing, and there isn’t very much I can do differently,” Donnelly said after buying items at Weis in Perry Hall that she couldn’t find on Amazon. “I have small children who are very picky, so I just have to deal with it.
“I could spend that money other places,” she said. “But what are you supposed to do? We need these things.”
