Get Ready For More Supermarket Price Hikes

The notorious Grocery Shrink Ray was supposed to help prevent this, or so we were told by apologists for it, but Datamonitor is reporting that Kraft Foods, Kellogg’s, ConAgra, Sara Lee, and Tyson “are all expected to announce a hike in the prices of their products” in the near future. Here are some of the hikes you can expect, according to the Chicago Sun-Times.

  • Cereal makers General Mills and Kellogg Co. have both said they will raise prices. General Mills “said it needed to make up for cost increases that it expects will total 9 percent.”
  • Kraft Foods, whose brands include Oscar Mayer, Philadelphia cream cheese, Oreos and Wheat Thins, will follow its 8% price increase earlier this year with another one to offset rising commodity costs.
  • Sara Lee will raise prices 20% for its meat products like Jimmy Dean sausages and Ball Park Franks. Sara Lee’s COO gave this mangled explanation to Datamonitor: “Price increases vary a lot by type of products but the increases will be as low as zero and some products we will decrease on and other increases (will be) in excess of 20%.”

The Chicago Sun-Times advises,

Overall grocery prices are expected to rise 5 percent to 6 percent this year. But some categories are projected to post higher increases, such as eggs, fats and oils and cereals.

A report by the Food Institute, a research group for manufacturers, predicted 2008 increases of at least 9 percent for those products.

“Grocery bills going up — again” [Chicago Sun-Times]
“US food firms to increase prices again” [Datamonitor] (subscription only)
(Photo: Getty)

Comments

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  1. ScubaSteveKzoo says:

    So let’s try and look on the bright side….maybe Americans will eat less because of this? Let’s slim down…

  2. winstonthorne says:

    Nobody speaks English like Sara Lee.

  3. afrix says:

    Two words: store brands.

  4. TheLemon says:

    @winstonthorne: Nobody speaks Corporate English like Sara Lee.

    Fixed.

  5. jwlukens says:

    Because of skyrocketing oil prices the cost to make many food items has gone up 20%-40%. Sadly the companies must still make a profit and this gets passed down to us. Time to start gardening soon?

  6. Scuba Steve says:

    @ScubaSteveKzoo:

    Smaller portions? You mean like how they charge 3x as much for those “100 calorie” snack packs?

    Not bloody likely.

  7. duetoprivacy says:

    I buy store brand anyways…

  8. backbroken says:

    “…increases as low as zero…”

    I suppose the decreases will be as high as zero.

  9. backbroken says:

    Whatever happened to all the hybrid snobs who used to inhabit most corners of the internet, extolling the virtues of high gas prices? Strangely, you don’t hear from those guys much anymore.

  10. ThunderRoad says:

    Store brands are almost always just as tasty as the real ones, generally because they are the same as the real ones.

    Except traditional Kraft Macaroni and Cheese. For some reason that is still tastier than all the store brand and off brands.

  11. MissPeacock says:

    The blurb on the main Consumerist page says “Here are some of the hikes you can expect, according to the Chicago Sun-Times,” but when you click on the link, you don’t see any of the price changes or that statement on this page.

  12. My keyboard has a typo key says:

    @ThunderRoad:

    Yeah all store brands are as good. It is like saying a monkey paw is a good charm.

    Some stuff is ok, some stuff is yummy. Most of it is crap.I am blind mostly to brands. I let my tongue tell me what is good.

    There is some stuff in national brand I wil eat. Some of it is oddball brand.I just do not buy store brand s are ‘almost’ the end all in quality of taste and texture. Some products just are crap. Even for national brands.

    I was told a store brand instant coffee was Foldgers rebranded… Not even close.. It was a lesser brand in taste, color and look. Which matched Maxwell House in every way.

    When i first seen the shrink. I seen it coming. I do not post much here. Though I seen the shrink, and profit grab.

  13. It’s not food, but Hasbro products are going to be getting some price hikes soon as well. Likely going to hit the Transformers and GI Joe lines.

  14. theblackdog says:

    @ThunderRoad: I totally agree with you on the Mac and Cheese. I have noticed I have not been able to find a replacement store brand for Cheez-It’s either.

    Also folks, how much do you want to bet that the shrink ray continues to hit products after the price increase?

    In some way there’s a bit of irony to this. I got into the habit of cooking more often to save money, and now my costs are going up, though it is still cheaper to cook at home, there’s just not as much savings :-)

  15. ratnerstar says:

    @backbroken: We’re still here, we’re just afraid of getting torn apart by angry mobs.

    I have a regular non-hybrid car (albeit an efficient one) and drive to work, so gas prices hurt me as much as anyone. But a) in the long run, high prices will reduce consumption, which is a good thing, and b) you’re going to have to get used them, whether you like it or not. A little short term pain for long term gain, you know? You’d think people who frequent the Consumerist would understand that concept.

  16. HogwartsAlum says:

    @jwlukens:

    That’s just what I was thinking…this fall I think I’ll dig out a vegetable bed and get it ready for next year. It’s too late to do it now.

    And continue to shop at Aldi’s. :)

  17. Thorgryn says:

    Ok, so now that they are increasing the price, that means everything that was shrunk will magically regrow back to it’s original size… Right?

    What do you mean no?

  18. Shadowfire says:

    @jwlukens: Oil prices are only a part of it. Also factored in is this stupid fascination with corn based ethanol, shifting more of our corn that way, making corn more expensive, while at the same time giving farmers an incentive to plant corn instead of wheat, soy, cotton, etc, and thus increasing the price of -those- input materials as well. And, when you get down to it, things tend to just increase in price over time.

  19. MexiFinn says:

    I don’t think I buy from any of those brands… period.

  20. MexiFinn says:

    @Shadowfire:

    Amen. I always thought the whole E85 thing was a crock of doodie.

  21. johnva says:

    @ratnerstar: I agree with all that you’re saying. Recessions are when the economy (and society, by extension) becomes more efficient and sheds some of the fat. It’s painful, but necessary. I just wish we wouldn’t allow these various economic bubbles to get so out of control, setting us up for a big fall. We should regulate things via tax and other policy to put the brakes on before we have a massive bubble.

  22. @MissPeacock: The price changes are summaries of paragraphs from the Chicago Sun-Times article. The Sara Lee quote is from the Datamonitor article, which I can’t link to. I’ll add a note above to make that distinction clear. Thanks.

  23. Angryrider says:

    I buy most of my non essential groceries on sale. Cereal, Wonder Bread, Crackers, Cookies, etc. But it does suck that the value goes down…

  24. NotATool says:

    @jwlukens: Do you see food company executives taking pay cuts? How are their salaries immune to the shrink ray? Their products costs have to rise in order to maintain or increase their salaries, in these days of high gas prices.

  25. Whoa says:

    @twiddling_my_thumbs:

    “Yeah all store brands are as good. It is like saying a monkey paw is a good charm.”

    thumbs… I agree that the store brands don’t always cut it. I find that a (smaller) place like Trader Joe’s has a much better success rate with their store brands than the behemoth chains do, as they can invest more time in finding good substitutes.

    Monkey paws, though? So, if I’ve read your analogy correctly, they work some of the time?

  26. alice_bunnie says:

    @ThunderRoad:

    I like the Kroger brand Mac and Cheese better than Kraft. I think it tastes tangier than Kraft. Kraft tastes sugary. But, Corn Flakes, Rice Krispies, Cheez Its & Premium Saltines have to be brand name. :)

    I just started doing The Grocery Game. I don’t know if it’s going to save me much money, because I don’t buy a lot of big name stuff. But, I think I might get things like treats and health and beauty items cheap or free.

    For a family of 6 we actually spend well under the national average, and actually I don’t do all the tricks. I just don’t buy a lot of junk, and only buy meats and high mark up stuff when it’s on sale.

  27. incognit000 says:

    OUR ECONOMY IS STRONG AND INFLATION IS VERY LOW.

  28. platoreborn says:

    E85′s many downsides far out weigh it’s benefits to our environment and economy. Not only do the corn subsidies for e85 increase our food prices and decreases the available land for healthier food products, like Shadowfire stated, it also is a much less efficient form of fuel. You need more fuel to go the same amount of miles from gasoline. Also, in order to feed the demand of the U.S. we would need to have more than 3 times the available land to grow corn.

    It is a good idea, but I think we can come up with something better.

  29. Imaginary_Friend says:

    I guess we can all sate our hunger with some of those tasty bull penises we’ve been giving to the dog.

    “Move over, Rex – it’s Mama’s turn to chew!”
    [consumerist.com]

  30. hilighter says:

    It’s happening to pet food, too. The dog food I buy went up $10 in the last month.

  31. dry-roasted-peanuts says:

    So, we can clearly expect prices to go back down again when (optimistically) oil prices fall, right?

    Right?

    Damn you crickets, shut up! I can’t hear anybody over your incessant chirping!

  32. lalaland13 says:

    For the longest time I thought it was “Nobody does it like Sara Lee” rather than “Nobody doesn’t like Sara Lee.”

    But that statement? I don’t think I’ll ever understand what the hell that is about.

  33. foreverinbluejeans says:

    Food prices caused meal plans to go up about an extra $250-$300 per semester at my school. I’m so glad I’m not required to purchase one.

    Lately I’ve been taking advangtage of coupons and Kroger’s double or tripling the coupons (depending on the price). I’ve saved (on average) about $15 on each shopping trip. Big Lot’s has also saved me a ton of money on personal products (toothpaste, shaving cream, etc)

    Every little bit helps.

  34. rellog says:

    So are the items that have been shrink-rayed down going to also get hit with price increases? That’s double dipping. They have effectively raised their prices by near 20% in some cases, and now will jack the price up further? Some of these companies will lose my business permanently! I’ve already banned any ice cream company that reduced their sizes down to 1.5QT, I guess now I’ll have to be more vigilant about figuring out which companies are looking to take advantage of our economic downturn.

  35. I love those “Nature’s Promise” cookies from Stop ‘n’ Shop. Have you ever had the key lime flavor? AWESOME.

  36. mominma1 says:

    I’ve got an idea! How about we stop buying processed foods that are full of corn and crap and eat honest to god real whole food? Lentils, split peas, oatmeal…all are healthy, nutritious and extremely affordable despite the rising foods costs.

    The cost of processed foods is going to rise even more when the corn prices rise through the roof next year. All processed food contains some corn product…corn syrup..etc. Read “Ominivore’s Dilema” and you’ll get the picture.

    Honestly, with a husband in the food industry we’ve been watching rising wholesale prices for two years due to gas and production issues (including using corn for ethanol…which depletes the supply for the food companies and increases costs). Flour, butter, milk…the core ingredients have nearly doubled in the last couple of years.

  37. backbroken says:

    @ratnerstar: I fully understand the concepts of supply/demand and that high gas prices are coming (note, they are not REALLY here yet.) But I just find it a bit funny that the hybreeders were all smiles when the rising energy costs were only hurting us at the pump. But now that it’s hitting everyone in the wallet, you don’t here as much about it. You’d think consumerist readers would understand the concept that rising energy costs will eventually affect the cost of everything.

    FWIW, my car gets 27 mpg and the car I had before (back when gas was under a dollar/gallon) got over 30 mpg.

  38. backbroken says:

    Hear not here. I think it reads anyway.

  39. Canino says:

    I find that store brand stuff is generally a class lower in quality and taste than name brand most of the time. But, most of the time the name brand just isnt’ worth the 2-2.5x more they want for it so I end up getting store brand anyway. Unfortunately I haven’t found a store brand cola I can drink – they’re all horrible and taste watered down.

  40. balthisar says:

    I don’t know where everyone finds such awesome deals on store brands. I only ever see a few cents difference in the gross price. My stores all carry unit pricing on the shelves, too, and the store brands just aren’t competitive. Except bread, that’s competitive, but not as tastey (if you don’t like bread, you’re not eating the right bread).

    I’ve also since started playing thegrocerygame. It only took two trips to the store to stop being one of those “coupons are for losers and poor people” type of guys to someone who can easily absorb $5 gasoline in a cost-neutral way. It’s been excellent for stocking up on meats and condiments, cleaning supplies, and pharm/hygiene items. Because it works based on stocking up, it’s not very useful for fresh fruits and veggies, though, because they won’t last for the whole 12 week cycle. It’s still worth it based on the other savings, though.

  41. lemur says:

    @incognit000: Yes, if you type it often enough, in capitals and really really believe it, it will come true!

    And just for giggles, you can also get a pony and a unicorn that way.

  42. Parapraxis says:

    I just break into other people’s houses for my nilla wafer cravings.

    Fuck Private Selection brand imitation vanilla wafers.

  43. rlee says:

    @afrix: Four words: Don’t count on it. Both Giant and Safeway have shrunk their store brand yoghurt from 8oz to 6oz, with little if any price reduction.

  44. u1itn0w2day says:

    One urban legend has store brands being frequently made from excess or poor quality national brand.And that actaully includes things like too much or too litte sugar.Some national brands have more sugar than store brands but that’s what people want-a sweeter taste or taste period.On the other hand when stuff like more peanutty peanut butter has more natural ingrediants like peanuts and nutrients and yet less sugar many reject it.

    Can you afford TASTE or should something that tastes OK and doesn’t make you sick be what you are buying? The national brands rely on the shopping HABITs of consumers like a drug dealer relying on their junky customer’s addiction.Are you buying out of habit,convenience,price or the need for the ‘comfort’ effect.

  45. TWSS says:

    @mominma1: Sure, except, as you noted, staples are increasing in price just as much if not more than processed foods. The costs at the farmer’s markets around here are higher than last year, too.

    I guess we should be growing our own food, but the cost of fertilizer is up, seed catalogs are running out of stock, and those of us who work long hours can’t afford to cut back to make time to dig around in the dirt.

    No one’s immune. Unless you’re, like, a Breatharian.

  46. howie_in_az says:

    @loquaciousmusic: * in key lime flavor is awesome.

    @balthisar: We shop mostly at Fry’s since they offer gas discounts if you spend more than $100. We used to go once every other week, sometimes tossing things out that spoiled, but now we’re going once a week. Nothing’s spoiled since we’ve done this. It also helps that we figure out what we want to eat for the week, then plan the grocery-getting around those ingredients. Additionally, we only buy things on sale (Fry’s almost always has 10/$10 or similar deals). The latest deal is 20 bottles of Powerade, which the fiance loves, plus 2×24 bottles of Disanti bottled water for $15 + tax. She’s got enough Powerade to last through the apocalypse now.

  47. RodAox says:

    There was an article i read somewhere about a week ago, it talked about how people got together to purchase in bulk from the farmer himself/herself then people would just split what was bought among themselves. It is cheaper and healthier, and our economy sucks right now so you gotta bite the bullet and keep on trucking i guess… I have been living without health insurance for 5 years now…. Price increase on cheesecake and manufactured cheese is the last of my worry…..

    We are all doomed….DOOOMEDD I SAY!…..pass the soup plz.

  48. Yurei says:

    I actually saw an odd thing at the grocery store this morning- I ran in to grab a tin of breadcrumbs since I need them for an upcoming dinner and we don’t have the kind I need at the house. My mother happened to mention they were on sale this week and I thought “Great!” After hunting the bloody things down (WHY are they in with the cold foods? It makes NO sense what-so-ever!) I was looking at the store brand’s crumbs versus everything else, and I always get the store brand on things like that.

    The store brand was cheaper- somewhat. They had the big tall cans on sale for $.99, and the smaller cans on sale for $.89. Naturally I looked at the sizes of both carefully, figuring that the small one might really be the better buy as is sometimes the case, plus I really didn’t need the bigger can. Well low and behold, while looking at the unit pricing, the smaller can roughly half the size of the larger which was marked as a “Store special” was $.90/lb versus the larger can which was just “on sale” for $.69/lb on the unit cost.

    I was like “holy crap! What a difference!” I don’t recall the exact sizes on the cans, they may have been something like 8 and 14 oz. The big can seemed a better buy, for ten more cents you got almost double the amount at a much lower unit cost. Plus, bread crumbs keep well enough so that I can make the recipe I need them for a few times. I only wish I had my camera with me to snap a picture. It was comical.

    I find that store brands on certain things you’re not particularly paying attention to taste are fine. Things like bread crumbs I am going to add my own seasonings to, so I really don’t care how much it differs. I do however want actual brand names on soda and cereal to name a few things. I eat those to specifically taste those, and I find the store brands are usually blech. Cheese is another thing i’m brand choosy on, and milk to a degree- but only because I find generic, store brand milk spoilers faster often than brand names. The exception to this is Hannaford’s milk, which lasts a week beyond the expiration date every time. Either it’s really, really fresh when they sell it to you, or I shudder to think what they put in it.

    Just about everythign else is fine for generic’s sake.

  49. ChuckECheese says:

    @balthisar: I commented on this a few days ago in another Consumerist post. Wal-Mart has been raising the prices of their store brands, and lowering the prices of name brands, in some cases, making it so that both the store and name brands are the same price or nearly so. I’ve noticed the same thing at Albertoids lately too.

    Keep an eye on the financials for these food companies. I expect to see record profits. Even a tripling in the cost of gasoline doesn’t equate to 30% retail price hikes, because the actual cost of producing and shipping an item is quite small, on a per-item basis, meaning that any cost increase should also be quite small. There are only a few ¢ worth of grain in a box of cereal, and you can fit a lot of cereal in a truck, meaning the per-box cost of shipping is also tiny, meaning any increase in costs should, per box, be tiny.

    Cereal manufacturers tried jacking the price of cereal to $5 a box in the early ’90s. Does anybody remember that? It took the threat of congressional intervention to get them to back down. The difference today is that they have an ostensible excuse to do so, and an indifferent congress. And why does Tide need an immediate 15% price hike (actually, the retail price increase is nearly 100% in the past 3 years) when Purex products have increased less than 10% in the past 3 years?

    People should be aware that much of this so-called inflation is not inevitable; it’s a ploy by manufacturers and sellers to make a bunch of money, money that they haven’t been able to make for the past few years, as Wal-Mart has been squeezing every dime out of their costs and profits. I also think that these food and beverage manufacturers are raising prices in order to make their stocks more appealing to investors–they don’t want to get cut out of this stock-market bubble you know.

  50. Boulderite says:

    I feel for people who were having difficulty making ends meet before gas hit $3.00 a gallon (now $4.00 a gallon) and with food prices going up and up and up. More and more people will have to choose between good wholesome food and gas to get to and from work. I can only imagine how scary it is for them.

    Whenever I talk to a person or family that is struggling like this I always direct them to a program in Colorado, called Share Colorado http://www.sharecolorado.com They buy food in BULK and you can order food from them and the prices are better than at the grocery. On their July Classic menu this month (they have about five different menus)

    JULY CLASSIC PKG. Only $25.00

    Italian Turkey Sausage 1 lb
    Small Shrimp Ring 10oz
    Beef And Bean Wrap 5-Per Package 1.25 lb
    Chicken Broccoli 2pak 1 lb
    Birdseye Skillet Dinner 44 oz
    Sausage /w Cheddar Smoked 1 lb

    Broccoli Iceless 1 ea.
    Cucumbers 2ea.
    Lettuce Cello 1 ea.
    Plums Black 6 ea.
    Nectarines 5 ea
    Oranges Fancy 5 ea.

    You don’t need to live in Colorado to benefit from this organization. They have Host Site Locations in

    South Dakota
    Wyoming
    New Mexico
    Arizona
    Kansas
    Nebraska
    Oklahoma
    Missouri
    Texas
    Utah

    The site says that additional fees may apply for location outside of Colorado.

  51. SexierThanJesus says:

    So all those smug guys who said that rising gas prices would never affect them are going to apologize right?

    Right?

  52. Jevia says:

    I keep reading about ‘record profits’ for grocery stores and oil companies. Of course they are having ‘record profits’ they are using the current economic conditions to jack up their prices and pad their management salary/bonus and stock price. I certainly never see the same kind of ‘profit,’ and in fact I’m going to start running at a deficit soon with all these price hikes. And why do they get away with it? Because our government lets them and continues to give them and their rich CEO/stockholders tax breaks. Not like we peons in the public have any choice, we have to eat and we have to use some sort of transportation to get to work. Isn’t free market capitalism wonderful?

  53. domo-arigato says:

    @ScubaSteveKzoo:
    You hit the nail on the head! Despite having 2 teenagers in the house I usually buy pretty healthy stuff; however, we do like to BBQ. For the past several months I’ve been buying zero meat, & NO extra stuff like chips, ice cream, etc. I realized that I’m eating healthier now despite myself. The kids don’t complain as much as I thought they would!

  54. Silversmok3 says:

    Did anybody simply consider that they are raising prices because they can?

    Why didn’t they lay the blame on fuel prices when the portions started shrinking?Why the hidden effort to sneak the same price on a lower amount of product?

    Methinks accounting took a look and realized they could simply jack up prices by a percentage,lay the blame on big oil, and walk away rich.

  55. Mykro says:

    Ya’know guys… Everyone is complaining about how food prices are going up, or product is shrinking.. Look back about 15 years ago. Things weren’t in huge containers or boxes…
    They say America is the fattest country, and everyone is wanting the big foods. They’re making the big foods more expensive and/or smaller to make sure you’ll limit yourself on your food choices and not buy so much. If you ask me, its sort of a win/win situation. You’re getting healthier even though you’re not realizing it!

  56. Grrrrrrr, now with two buns made of bacon. says:

    I’m sure it’s just like the oil companies…there’s a valid reason to raise prices, so what the hell…might as well take the opportunity to gouge! I wonder how many food corporation executives are putting in orders for new yachts?

    Pretty soon it’s going to be back to eating ramen for dinner. Sheesh, I thought I left that behind in college.

    Store brands are excellent if you find ones you like. Personally, I don’t have a problem with most store brand products and I buy the all the time. I probably save 30% off my food bill. It’s usually a trial and error process to find what you can and can’t live with.

  57. lockdog says:

    @HogwartsAlum: It’s not too late to garden for this year, even as far north as Upstate New York you should be able to get in two or three more crops of greens beans, and sugar snap and snow peas won’t go in for a few weeks yet.Cucumbers and squash all are pretty quick as well. Summer greens like chard will grow well with some shade cloth.

  58. nonzenze says:

    But some categories are projected to post higher increases, such as eggs, fats and oils and cereals.

    Does this mean Americans will finally stop getting fat? I would double my monthly food bill in exchange for not having to look at the grotesquely obese.

  59. ChuckECheese says:

    @nonzenze: Does this mean Americans will finally stop getting fat? Seeing that poor people buy less-expensive, lower-quality foodstuffs that are usually more empty-calorie laden, I’d say no.

    Seeing that stress (inflation, poverty) increases cortisol levels, which leads to weight gain, I’d say no.

    For all of you who are so smug about an overabundance of food, you should know that as recently as WWI and II that malnutrition and consequent poor health were such problems among the American public that a large number of our young men were considered unfit for military service. This is a reason why we got school lunch and milk programs.

  60. Clobberella says:

    @RodAox: Are you talking about a CSA (Community Sponsored Agriculture)? Those are pretty well worth it if you can get in on them before they reach capacity. Basically, you pay the farmer for a share of the whole season’s harvest up front, which in my area runs between $600-$750. You go to the farm yourself and pick up the goods weekly. It’s kind of like a grab bag, because what you get depends on what they happened to have ready that day, but you get enough of it to feed 4-6 people and you can always swap veggies with other members if you’re not keen on something you’ve gotten. Most farms have a variety of fruits and veggies; some will also do flowers, eggs, milk, cheese, or even meat. Assuming you do a lot of cooking (which is probably a wise idea right now) and you can find a CSA farm close by, you can save a ton of money.

  61. balthisar says:

    @SexierThanJesus: I’ll kind of apologize. It’s led me to start playing thegrocerygame as I said above, and using coupons. Not out of any real necessity, but out of cheapness. Otherwise the trade-off is (a) fewer toys, (b) fewer vacations, (c) fewer nights out, (d) well, pretty much fewer anything that I like to do for fun. Because I’m a good consumerist, I’d never let it arrive at (e) fewer personal savings, but I recognize that for lots of people less fortunate than me, option (e) would be appealing.

  62. ChuckECheese says:

    @Clobberella: How long is the harvest season? Honestly, $600 or more sounds like the opposite of a bargain, especially if it’s only produce. Something like this should be thought of as cost per month that you get groceries. I’m guessing it’s not a 12-month deal. It would be worthwhile only if you have a large family and time and equipment to can and freeze.