CINCINNATI — Picking up the essentials for the weekend — beer and pizza — Bill Johnson has observed the prices.
“Everything’s high,” the fixed-income retiree said. “Everything.”
That includes everyday household items. Procter and Gamble reporting its earnings for the past three months said prices increased an average of 3%, driven by increases outside of the U.S.
“Even though the cost pressures start to come down a little bit, they’re still really well elevated above pre-pandemic levels,” said Henry Jin, associate professor of supple chain management at Miami University.
The Producer Price Index is still well above pre-pandemic levels, but is down from its peak in June 2022.
“Even if the overall commodity price drops, the contract price doesn't necessarily drop immediately, and then over time, companies adjust, they expand their operating budget, they increase their worker pay and all of a sudden, our prices are here to stay,” Jin said.
Jin highlighted that the company’s margins decreased slightly.
“What that tells you is that, yes, they’re raising prices, but they’re not raising 100% of the prices,” he said.
The company is conscious that raising prices too high would force the consumer to buy a generic brand product, Jin said. The earnings report said U.S. consumer volume grew in the last three months.
“Prices are just very, very sticky,” Jin said. “Once prices go up, they generally don’t go down.”
How to save:
With prices on the rise, experts say there are a few things that can help cut costs.
Use barcodes to price compare
Nearly every store has its own app with a built-in barcode reader. When you’re standing in the aisle of one store, open the app of another store.
Since the barcodes are the same on products in every store, you can cross reference the price. If you find a lower option, you may even be able to ask for a price match (depending on the store).
Be aware of what product is actually on sale
Rivertown IGA COO Heather Frye recommends consumers be aware of which specific product is on sale.
Frye said there might be one item advertised that will “knock your socks off” but “all the other ones surrounding it are going to be at a higher cost.”
Thus, when you’re examining the ads, be aware that the low cost item may not be the best financial fit for your family — as it could be a lower quantity than you’ll end up needing.
The New Richmond local grocery store said its been trying to keep costs down as much as it can for its customers by procuring products in larger quantities.
Consider reusables
If you’re going through disposable items daily — things like plastic bags for snacks or fruit — consider doing the math to calculate how many uses it would take for a reusable item to make sense.
Many stores now sell reusable clear plastic bags or silverware.
Do your homework on generic brands
While generic brands are often less expensive, Jin said the quality isn’t necessarily comparable.
“Price per ounce doesn’t mean anything,” Jin said. “For instance, if you use an inferior laundry detergent, you might end up having to use two loads to wash something that might take only one load.”
The professor highlighted that consumer utility plays a huge role in determining the value.
