Cost for 'basket' of 15 goods rises 7.5%

A basket of groceries, gasoline and blue jeans is costing consumers 7.5 percent more than it did six months ago, according to a Deseret News analysis.

The price of the News' basket of 15 items, tracked since April, rose 1.1 percent in the past month — a much steadier increase than the 9 percent jump recorded between August and September, and a rise of 7.5 percent since April.

The U.S. Department of Agriculture projects an overall 5 percent to 6 percent increase in the price of food for 2008, the highest annual increase in 18 years. And the economic and commodity analysis firm Advanced Economic Solutions estimates food prices will rise an average 9 percent a year through 2012.

"The food manufacturers are high-volume, low-margin companies that have initially absorbed a lot of the costs of higher commodities prices," said Scott Faber, vice president of federal affairs for the Grocery Manufacturers Association, a trade group that includes Kellogg Co., Kraft Foods Inc. and Kroger Co. "But ultimately, higher commodities prices will be reflected in higher retail prices in the grocery aisle."

Smith's Food & Drug Stores, which stocks its shelves with Kroger products, notes the private label's goods are manufactured by several companies, and Smith's therefore wouldn't speculate on future food inflation. The company did say it would continue to provide good prices and seek to keep overhead costs as low as possible.

"We can't really speculate on specifics at this point in time because new opportunities may present themselves for cost savings that we haven't thought of yet," vice president of public affairs Marsha L. Gilford said in an e-mail to the Deseret News. "We continue to also look for other ways to deliver savings, like through $4 generic prescriptions and fuel savings."

The Deseret News since April has been tracking prices of milk, bread, frozen corn, laundry soap, hamburger meat, diapers, eggs, orange juice, Cheerios, Oreos, bananas, movie tickets, gasoline, takeout pizza and blue jeans to gauge how they change over time.

For stability, the best buys have been orange juice, takeout pizza and a movie ticket — and gas to get there will cost 7 percent less than it did a month ago.

Egg prices have been the most volatile, and at this point, they are down 14.5 percent in the past month.

Laundry soap's price this month rose for the first time in six months. It costs $2 more, an increase of 13 percent. Also up more than 7 percent were milk and frozen corn. Blue jeans' price tag went up 13.6 percent.