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Take a look around your local supermarket, and you’ll notice a few changes — namely the prices! Many of the staples Americans buy every day are now approaching record high prices. CNBC’s Vera Gibbons takes a look at what’s causing the hike and has a few ideas to save on your next bill:
What’s behind the rising prices?
Food costs are increasing at nearly a 6 percent clip per year, double what the government had forecast. There are a number of factors, but two seem to stick out above the rest. For one, transportation costs have been up. When that happens, it costs more to get products to the stores, and the companies are simply passing down the added expense to shoppers.
Another big factor is the high price of corn, thanks in part to increasing demand for corn-based ethanol. Prices have nearly doubled over the past two years, so the prices of everything from cereals and sodas to beef and milk are going up as well.
Whole milk sold for an average price per gallon of $2.64 in January of this year. In July, that same gallon was going for $3.74. That’s a record increase, and forecasters are predicting milk could hit a historic high of $5.00 a gallon in September.
Take a look at the rising average prices of some other staples:
July ’06 July ‘07
Eggs $1.21/dozen $1.50/dozen
100% U.S. ground beef $2.15/lb $2.37/lb
Chicken breasts $2.13/lb $2.38/lb
American processed cheese $3.58/lb $3.76/lb
Butter (salted/stick) $2.79/lb $3.06/lb
Ice cream (1/2 gallon) $3.62 $3.83
Ways to save
The average American spends 10 percent of their disposable income on food. For a single person, that averages out to more than $192 each month. Families of two are shelling out more than $336, and a family of four spends more than $480 a month.
So, how can you trim down your next grocery bill? For starters, plan ahead! It might seem like a no-brainer, but many Americans think of what they want to buy, then go out and buy it. Shoppers should start using weekly circulars and grocery ads to plan their shopping.
If there’s a decent deal on an item you need, stock up. And, remember to use those coupons! According to “Consumer Reports,” they helped Americans save $30 billion dollars last year alone.
Don’t forget to pick up those store savings cards. The time it takes to register for one will be well worth it. In addition to the deals in the circulars, often you will find extra savings available in the store that they do not advertise. And while you are at it, speak up! If you take the time to ask, many stores will match a lower advertised price from a competing store.
Another easy thing you can do: Double-check the receipt! Those scanners do make mistakes, and it happens more often than you think. “Consumer Reports” did a recent survey and found that 70 percent of shoppers have found mistakes.
For even more savings, try generic brands. They have come a long way in taste and flavor. And consider this: If a shopper switched entirely to generic brands, they would stand to shave an average of 40 percent off the annual grocery bill!