DENVER — Record-inflation has left some grocery shoppers feeling sticker shock over the last few months. According to NBC News, consumer prices rose by 7% in December over the previous year.
Shoppers have seen price increases at grocery stores, and so have food banks that have to buy those items by the truck-load.
"Inflation in food costs increases have really hit us hard at Food Bank of the Rockies," CEO Erin Pulling said. "We’re actually spending triple the amount of money on food than we were three years ago, that’s almost a million dollars a month."
While 85% of the items the food bank gives are donated, the organization buys the other 15% to provide fresh produce, vegetables, and culturally responsive food.
"We're blown away by how quickly the costs have increased," Pulling stated. "Canned fruit up 30%. Spaghetti, which is something we all purchase at the grocery store, is up 15% just over December of last year. When we're purchasing food by the truck load that really hits our expenses."
9NEWS spoke to Mac Clouse, a finance professor at the University of Denver to find out when shoppers would see some financial relief.
Why are we seeing such major price increases right now?
Clouse: Inflation is usually caused by too much demand or too little supply and right now we have both. We have a lot of consumers that have a lot of money to spend. We’ve been through two years where a lot of things consumers could not spend that normally would happen like vacations and travel so they’ve got money to spend and then we’ve got problems supplying the goods and services, that people are trying to buy with the supply chain issues and labor issues, so we’ve got both. It's a perfect storm, too much demand, too little supply and so naturally you’re going to see rising prices.
The grocery prices are where the consumers really do feel and see the inflation. In other years when we said we’d have 2-3% inflation, you wouldn’t notice it as a consumer but when you go to the grocery store and what you bought last week is now costing you a lot more or when you go to the gas station and you fill up your tank that’s when consumers really see that the inflation is real.
When do we think we'd see some relief?
Clouse: I think most people think it’s not going to be soon in spite of what we may have heard, that it’s just temporary, no. You’ve got to fix all the problems, you’ve got to fix all the supply chain problems with all those container ships that are floating out there in the ports waiting to unload their containers, we have to fix that problem. We have to fix the production problem of getting people to come back to work, and that’s just on the supply side.
The demand side is a little easier, eventually people will run out of money, but still that doesn’t help us in terms of getting the goods that we need.
Are you estimating months?
Clouse: Certainly months. I hope it’s not years, but I think the rest of this year we’ll certainly see inflationary problems.
It’s not like we’re going to see a flip the switch and all the sudden the inflation is gone, it’s going to be with us for a while. It hopefully will slow down and eventually it will get back to what we normally see, we normally see some price increases each year certainly, not like 7% and the numbers we have been seeing lately.
What should consumers do in the meantime?
Clouse: This is the time that we need to pay more attention to our own personal budgets, recognizing that the things you’ve taken for granted like groceries and gasoline are now going to take a bigger chunk out of our family budget. If your budget hasn’t increased, which is not likely during this time period but there’s a bigger bite for those things and that means something has got to give and you just need to be smarter about what you’re spending your discretionary dollars on.
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