• Stephen Warneke

Why Grocery Prices Are SOARING... And How You Can SAVE!

The coronavirus pandemic has thrown a wrench in the restaurant industry, closing some and limiting most to takeout or delivery. The entire food supply chain has been disrupted. So why the higher prices on your grocery items?

According to a recent report from the U.S. Bureau of Labor Statistics, eggs are now 16% more expensive than they were in March. Meat, poultry and fish are 4.3% more expensive. Cereal & bakery products are 2.9% more expensive, and all dairy products jumped by 1.5%.

What used to be a $20 grocery trip for breakfast for the week is now $30. And every little bit counts, with millions still waiting for either stimulus checks or for their unemployment applications to be approved.

So exactly WHY are grocery prices rising? Is it corporate greed knowing that millions of Americans are forced to grocery shop more than usual due to restaurants being closed? Are giant retailers taking advantage of Americans panic buying toilet paper and household cleaning products?

Your Detective of the Air, Steve Warneke, got these answers and what YOU can do to save money during all this from The Supermarket Guru, Phil Lempert. Phil is a television & radio news reporter, newspaper columnist, author, consumerologist, and food marketing expert, focusing on analysis & issues impacting food, health & retail industries. He has appeared regularly on ABC News Now, The View, and The Today Show.

1. Grocery prices are soaring by record gains… is this supply and demand? Is it price gouging? Is it a result of higher costs due to increased safety measures?

"Well, first of all," Phil said, "the BLS report of 2.6% [increase overall] in my opinion is very misleading. If we look at Nielsen data from this time, as compared to a year ago, the numbers are very different:

  • Fresh beef up 10.9%

  • Fresh chicken 10.5%

  • Eggs 26.9%

  • Cheese 8.7%

So what we're really seeing is those fresh products really have double-digit increases!"

"We really have to put everything together to really see what the real picture is and we're not price gouging at all- we've got a broken supply chain which has really been, what's been the problem in having our supermarkets not being stocked..."

2. Large meat plants had to close down due to high infection rates which have caused a meat shortage. What else has happened? How has the pandemic affected other portions of the food supply chain?

The Supermarket Guru explained that like meatpacking plants, farmers work in the fields shoulder to shoulder, so if someone gets sick, the whole team is laid off. "We really, from this COVID-19, really have to take a good look at the entire food supply chain and fix what the problems are," Mr, Lempert declared, "And in fact if we look at meatpacking plants that you know you brought up, those should be more automated..."

"This is really a wake-up call to the entire food industry to be able to say. "Hey, you know, let's use robots when we can, let's use better technology when we can, because we can't have this happen again."

3. There has been a change in the habits of the consumer. Consumer. We aren’t eating out as much and are cooking more at home. The food supply chain has to readjust to get that food from restaurants to grocery stores. How long does that take and what if the adjustment occurs and restaurants reopen with large success or there’s a vaccine? Will it then take time to revert back?

"Everything's gonna change, whether it's restaurants, whether it's supermarkets... what we're really seeing is a whole reimagination of food."

Mr. Lempert's friend, Wolfgang Puck, explained that all of his restaurants were now going to have half the tables they had before and half the staff, and with rent not going down, prices at restaurants will have to go up. Business is just simply going to be much harder on restaurants who've even made it this far during this crisis.

Mr. Lempert also revealed that supermarkets are reporting the need for fewer people at a time in their stores, and ideas being thrown around for having every other check stand open and plexiglass barriers between the cashier and consumer.

"We have a lot of retailers that are reimagining what the food supply is going to be in the future, and it's going to be a shorter supply chain, which will be, in the long run, more efficient."

"When we look at certain chains like Publix for example, they've done a fabulous job not only in understanding what consumers are wanting but also in working with Feeding America, getting food- I think they've bought something like 1.8 million dollars of produce directly from farms- giving it to Feeding America."

4. Are we at a peak of rising grocery prices? Or do you see even bigger increases in our future?

"Yes, absolutely," Phil said. "If we take a look at the meat prices, for example, we haven't felt the impact of these plants around the country that have shut down yet. If we look at Tysoon, who last week said, 'We're going to reduce prices of ground beef 20-30% to get confidence back in our system,' that's huge."

"I think we're going to see these price increases through January, and keep in mind that here in the U.S. we've got the cheapest food supply in the world, and that's really going to change." It's important every farmer gets their fair share. Supermarkets also need to make money while now facing additional expenses such as plexiglass installations, more sanitation, installing anti-microbial check stand belts, etc.

5. So what are some tips for consumers to keep their food budget down while their grocery shopping during this more expensive time?

  1. AVOID DELIVERY. Mr. Lempert pointed out that a lot of Americans are going to get sticker shock when they see their credit card bill this month, because you can't use all those coupons like you can in-store, plus those delivery fees, plus all those driver tips really add up. So either go shopping yourself or order online and pick it up.

  2. SHOP AROUND. See which stores have what sales, and plan accordingly. Grocers like Aldi have HALF as many people in there at a time as compared to places like Publix.

You can find more tips and tricks from Mr. Phil Lempert at www.supermarketguru.com.

The Steve Warneke Show is LIVE SATURDAYS at 10AM EST to 850 WFTL on your South Florida AM dial or you can stream live during the show at www.850wftl.com.

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Until next time...