Specialty food retailers said their customers overall have been very understanding about food price inflation, which was up 7 percent in January, compared with a year ago, according to the U.S. Bureau of Labor Statistics. Some high-end items — particularly meats and seafood — have become too expensive even for the big spenders, and retailers warn of more price increases to come on products such as coffee, along with ongoing supply chain shortfalls. Retailers are also absorbing some cost increases and are carefully managing their price image with consumers.
SFA News Daily recently spoke with (pictured left to right) Rachel Shemirani of Barons Market, Nate Conant of Shubie’s Marketplace, and Chad Winters of Leon’s Gourmet Grocer about how their shoppers are responding to food price inflation. Following is what they said:
Rachel Shemirani, senior vice president, Barons Market, Poway, California
Inflation has affected all departments, and all categories in the store. We are seeing price increases like we've never seen before across the board. We are seeing that shoppers are buying less of the more expensive products, such as meat and seafood. For the cuts that we carry, we are getting price increases almost weekly, and there's only so much we can hold back on those price changes.
However, even though prices of grocery/shelf stable products are going up, customers are still buying those items. They're really not changing their behavior as much as they are with meat and seafood.
What we are trying to do is hold back the price changes on staple items such as milk and eggs and bread and produce items, so that it feels a little better when the shopper comes in, because no one likes seeing price increases every week, and we really, really try to avoid that. I think by keeping those staple items at a lower cost for shoppers, even though we should be raising prices, that does calm the shopper and make them feel a little better. They're able to shop the rest of the store with more peace of mind. But the meat and seafood prices are outrageous. There's only so much we can do, and shoppers are buying much less of those.
Nate Conant, assistant general manager, Shubie’s Marketplace, Marblehead, Massachusetts
The biggest impact we have seen has been that there are some items we have had to stop carrying. For example, a mainstay of our prepared food case were crab cakes, which were absolutely delicious, but one day we got a shipment, and we saw on the invoice that the price had literally tripled, so we had to refuse the shipment. We realized when we did the math we would have had to charge $30-plus per crab cake to make it make sense for us, which we were not going to do to our customers.
We have seen some folks who are disappointed in those kinds of changes, but we have some alternatives — we have salmon cakes now that are really delicious.
Even with our wines, we are seeing prices going up and up and up. It’s a combination of shipping costs, and a couple of bad vintages from some regions, including Burgundy.
We do receive the occasional comment from customers about price, but folks seem to be very understanding. We are very, very grateful for the folks who have continued to remain customers and have kept us afloat through this entire pandemic.
Chad Winters, chief foodie, Leon’s Gourmet Grocer, Lincoln, Nebraska
Our customers are a bunch of educated and understanding people and are well abreast of the challenges we are all facing. I haven’t noticed any changes in shoppers’ habits, but it definitely is concerning to me as a retailer, especially as a specialty retailer.
Generally speaking, when an economic downturn happens, you worry whether people are going to quit consuming the things we are known for, like aged beef, but so far I have not noticed any change. I think they understand that prices are going up.
We are nervous about the price increases, though. We have never seen 7 percent inflation before. We ourselves are really not seeing huge increases in prices, however. We are seeing a modest increase, but the news likes to cover it, and every time I see one of those stories, it breaks my heart, because even though it is based on facts, it is not actually what we see happening here in our small community in the middle of the United States.
We are going to pass along a freight cost increase to consumers, but most of the prices will only move marginally — pennies. Of course, with gas prices rising to unprecedented levels since the war in Ukraine began, all bets are off going forward. I do not see any way inflation won’t affect every one of us at some level.
Our biggest challenge is still the supply chain. I was looking at the pasta section the other day, and we had multiple holes in pasta, which I had never seen before, even in private label. Also, imported specialty items are delayed, and that has been a struggle.
We are trying to make buys by forecasting into the future, but the challenge is that the supply isn’t there. You can buy $80,000 of pasta to make sure you have it at a low price, but if they can’t fill that order… That’s the biggest challenge.
Related: Rising Farming Costs May Further Drive Grocery Prices; Food Prices Continue to Rise.