Will Food Prices Follow Fuel Prices?
Will Food Prices Follow Fuel Prices? Save Email Print
Grand Island
Posted: 6:38 PM Nov 18, 2008
Last Updated: 6:42 PM Nov 18, 2008
Reporter: Sara Geake
Email Address: sara.geake@kolnkgin.com

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Experts have said for months that food prices are rising because of transportation costs.

Costs have increased for manufacturers and distributors, who pass that cost onto grocery stores.

In order to continue make a profit, stores pass those costs onto the consumer.

So although we're seeing relief at the pump, those savings have yet to trickle down to your local grocery store.

Phil Takunen of Wisconsin, likes what he sees at the gas pump these days.

"We're pretty happy. We're going out to California. It's going to save us a lot of money," he said.

But Takunen says he doesn't see that savings in the snacks he enjoys on his trip.

"They've gone up a lot. I don't know that they've been effected," said Takunen.

Effected by gas prices that drove food costs up.

Local groceries say when their costs go down, so will yours.

"If you remember when the fuel prices started rising, our grocery prices didn't just automatically jump up. It was a gradual thing," said Fred Groenke, store director of the Grand Island Super Saver. "There's a lot of stuff that's already in the pipeline that's already been bought and sold at a certain price."

And depending on how manufacturers and distributors price their goods, stores may not know if that fuel savings is getting passed on to them.

"Some include it in the cost to do it. Some add a fuel surcharge. Some of those hidden charges, we just see it as a higher cost of goods," said Groenke.

But those prices seem to be dropping.

"We've already started seeing as we look ahead at some of the commodities that there is already started to be some reduction," said Groenke.

So will that future savings be passed on to you? Most likely, but it depends where you shop.

"I can tell you what we do here at Super Saver is if the manufacturer passes us on a discount, we pass that on to our customers," said Groenke.

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