Grocery shoppers, restaurants face 'perfect storm' as prices surge

Colleen Phillips of Leechburg has seen firsthand how inflation rates cause her grocery bill to add up faster, making it almost unaffordable to purchase essential items.

“It’s outrageous,” Phillips told the Tribune-Review while shopping at Walmart in Natrona Heights this week. “You have to make meals like spaghetti where you can buy reasonably priced items. It’s cheaper to go to McDonald’s.”

Consumer prices surged 8.6% last month — a new 40-year high — compared to a year earlier, sending the price of gas, food and other goods skyrocketing.

With no end in sight, consumers and business owners are left to grapple with rising costs while searching for the best prices possible.

“It’s tough right now for sure,” said Tom Charley, co-owner of three Shop ’n Save stores in Westmoreland County. “I wish we weren’t living through this, but we are. We’re going to do our best to … try to keep prices down as much as we can.”

Debasish Chakraborty, dean of Seton Hill University’s School of Business, attributed high inflation rates to an influx of covid-19 relief funds that were funneled into the economy the past few years, supply chain disruptions because of the pandemic, tariffs imposed on China by the Trump administration, higher wages and Russia’s war in Ukraine.

“It’s a perfect storm of a lot of different things,” Chakraborty said.

Gas prices hit a $5 national average for the first time past week, a trend that’s felt in Allegheny and Westmoreland counties, according to AAA. That’s compared to prices in 2021, which were around $3.50 per gallon in both counties.

Those numbers aren’t slowing down, with a 4% increase recorded across the U.S. in May and a 50% increase in the last year, the Associated Press reported.

Food prices have also been steadily rising. In all, grocery costs nationwide increased 12% in May compared to a year earlier — the biggest spike since 1979, the AP reported.

Chakraborty anticipated inflation rates to peak in August and stabilize throughout the fall.

“The challenge for the Fed is to create a soft landing,” he said. “The Federal Reserve doesn’t want to increase interest (rates) so much that there’s a recession.”

Report shows dip in sales

U.S. retail sales slipped 0.3% last month, down from a revised 0.7% increase in April, the Commerce Department said.

A sharp decline in auto sales depressed the retail sales figure. Excluding autos, retail sales actually rose 0.5% last month. But excluding sales from gas stations, retail sales slipped 0.7%, showing how higher prices at the pump are accounting for more of shoppers’ overall spending.

The report also highlighted shoppers’ pullback on some of the products that were in hot demand during the height of the pandemic but are now falling out of favor. Sales fell roughly 1% for furniture and home furnishings stores and electronic and appliance retailers. Building and garden supply stores, as well as general merchandise retailers, are also showing signs of a sales slowdown.

Sales online fell 1%, as shoppers go back to physical stores. Meanwhile, sales at food stores rose 1.2% due to higher prices, not increased consumption. Business at restaurants was up 0.7%.

The retail report released Wednesday covers only about a third of overall consumer spending and doesn’t include services such as haircuts, hotel stays and plane tickets.

Pulling together

Across the region, local business owners have been working to find products at lower prices.

At the three Charley family Shop ’n Save stores — located along East Pittsburgh Street and Route 66 in Greensburg and on Route 22 in Murrysville — officials have increased their number of suppliers in order to shop for the best deals.

“We’re just searching out deals far more intensely than we’ve had to in the past,” Charley said. “It’s not our main supplier’s fault. … It’s just we need to keep an open eye everywhere now.”

Randy Sprankle — co-owner of Sprankle’s Neighborhood Market, with locations in Leechburg, Saxonburg and Kittanning — said that for the most part he has been able to keep prices of meat and produce low.

He noted, however, that the price of eggs, milk and deli meats and cheeses did increase slightly. Sprankle’s stores have also had low inventory on pet food and various baking items.

“We’ve always been pretty aggressive in pricing,” Sprankle said. “We have some items throughout the store that we do everyday low pricing on and really always have.”

Jackie Rose of New Kensington said her shopping trips have not been too painful, but she can tell prices have gone up. She noted the high prices of ground meat.

“It seems like everything is going up faster than normal,” Rose said while shopping at the Natrona Heights Walmart. “I can’t remember it going up like this before.”

Garry Walsh of Edgewood said a lot of basic items in stores, such as milk, have a noticeable price hike.

He said he is fortunate he does not have a tight budget, but he knows that is not the case for everyone.

“My heart goes out to those who have to be careful on everything they spend,” Walsh said. “I don’t know how people are surviving right now.”

Business impacts

While consumers are feeling impacts from high inflation rates, local businesses are also forced to look at their budgets.

According to Goldman Sachs survey in April of small business owners, 88% of respondents said inflationary pressures on their business have worsened since January. A February survey from the National Federation of Independent Business found that 22% of small business owners reported inflation was their single most important business problem.

“For almost everything we serve I’ve seen price increases, and some of that you’ll get a fuel surcharge as well as an extra X, Y, Z per item,” said Jim Bosco, owner of Major Stokes restaurant in Greensburg. “Unfortunately, it’s a little more difficult for small businesses to rework their menus, rewrite their menus and make on-the-fly price adjustments like some chain restaurants … can do.”

He noted that prices across the board have been higher than in the past.

Sam Murray, owner of Salsa Sam’s, which recently moved from Irwin to the Banco Business Park in North Huntingdon, said he has had to raise prices of his menu items because of inflation. He noted that container costs have risen significantly compared to other products he purchases.

“We put our prices up moderately, but we do all top quality, and our customers have really been understanding,” Murray said.

At Harvest Moon Coffee & Chocolates in Tarentum, owner Desiree Singleton has raised menu prices about 6% over the past year to account for high inflation rates.

“It’s not like you’re making money — it’s just keeping up with what’s going on with the prices,” Singleton said.

Despite having to raise prices, Singleton said her customers have been understanding.

“It’s quite amazing that there are no complaints or gripes because I think they understand they’re getting a better product,” Singleton said.

At Major Stokes, Bosco said he is looking forward to the future when prices begin to return to normal.

“We understand their pain,” Bosco said of his customers, “and we’ll all get through this together.”

Staff Writer Tanisha Thomas and The Associated Press contributed to this report.