The prices ain't right

IF YOU FEEL as though you spent more this month on your grocery runs than last month, you're probably right.

Faced with rising commodity prices, city retailers have been forced to pass off some of the cost to consumers, driving up the price of everything from bread to baba ghanoush.

"Everything is going up, and it's too expensive," said Dwayne Townes, a medical-unit clerk from Spring Garden who was shopping recently at the Fresh Grocer in North Philly. "It makes you want to give up food."

Well, hold onto your wallet, folks, because the price pinch is going to get worse.

Gas prices are expected to keep rising - after breaking a record for the most expensive February in history - and a higher price in the cost of cotton and other materials means that those new summer threads will likely cost more.

Driving this historic pain in the neck is a host of far-off factors that include increased global demand from places like China and India, recent unrest in the Middle East that makes oil investors nervous and a string of wacky weather around the world that has depleted the food supply.

But that strife a world away means a pared-down paycheck for shoppers and business owners here.

Carrying a 50-pound bag of sugar on his shoulder the other day, baker Damon Nasir said he's now paying 47 cents a pound for the ingredient, which can make up as much as 98 percent of some of his confections. Last year he paid about 35 cents a pound, he said.

"When you look at buying hundreds of pounds, that's a big difference," said Nasir, who runs Imagicakes, in North Philadelphia. He designs specialty cakes for birthdays, weddings, graduations and bar mitvahs, some of them that light up or are shaped like lottery machines or billboards.

Nasir is trying to keep prices down, but it's tough, he said. "We're pretty much holding the line at this point."

Pat's Steaks, in South Philadelphia, which raised the price of its cheesesteak from a tourist-targeted $8 last year to $8.50, is getting by with a bit less profit to keep from raising prices again, said spokesman Tommy Francano.

"Last year we bought a case of Cheese Whiz for $63," he said. "Now we're paying about $78."

Since last year, the cost of ingredients to make most supermarket standbys has rocketed: soybeans are up 48 percent, wheat 62 percent and corn 78 percent.

Stiff competition and the recession have prompted retailers to try to keep prices down, said Safeway Inc.'s chief executive, Steven Burd, whose company monitors competitors that include Walmart and Target, which both now sell food.

He said "virtually all retailers" have begun passing increased costs on to consumers.

That's after food manufacturers already began shrinking the size of their products while charging the same price. For example, a package of Hebrew National franks has gone from 12 to 11 ounces, and Haagen Dazs shrank its container from 16 to 14 ounces, Consumer Reports found in a recent survey.

In some cases, companies hide a decrease with a dent on the bottom of the package or by wrapping the food with thinner plastic, the magazine found.

Procter & Gamble, maker of Tide detergent, Pampers and other products, recently announced that it will raise prices because it is facing at least $1 billion in higher commodity costs this year.

Clothing designers began altering their lines and looking to alternative fabrics after bad weather decimated cotton crops, doubling the price of cotton in a year, according to analysts. The price of synthetics also doubled as manufacturers turned to those products to replace cotton.

The price of clothing has been held down in recent years by cheap labor in Asia, but workers there now want higher wages, according to news accounts.

"We do believe the folks across the board are going to be raising prices," Judd Tirnauer, chief financial officer of Philly-based Destination Maternity Corp., said.

Tirnauer foresees an increase of 5-10 percent or higher on some maternity items later this year, a company spokeswoman said.

And at the gas pump? Fuhgeddaboudit.

AAA Mid-Atlantic said yesterday that the average price in southeast Pennsylvania was $3.43 a gallon, up 77 cents in just five months. Turmoil in the Middle East, particularly in Libya, a major oil exporter, recently sent the price of crude above $100 for the first time in two years.

Rick Remington, manager of government affairs for AAA, warned that "coming just before springtime, the timing of the latest crude-oil price spike is foreboding." Prices generally rise as peak driving season approaches in the summer.

Remington said that research shows that American families and businesses are sending $1 billion overseas every day for oil. That's especially troubling to economists, who say that every dollar shipped overseas weakens the already anemic U.S. economic recovery.

"We spend more on gas, much of that goes overseas, so it's not re-spent here," said Temple University economist William Dunkelberg. "That means we have less to spend on everything else, so our stores get lower sales, hire fewer people, order less stuff from factories, etc. Fifty to 100 billion dollars in lower domestic sales will hurt indeed."

Back at the Fresh Grocer on North Broad Street, a handful of flabbergasted shoppers proposed what surely would sound like bad news to city retailers.

"The prices are ridiculous," said Nidja Fisher, of Haddonfield, N.J. "I'm going to Delaware to do my shopping from now on so I don't have to pay the taxes."

College students - noted for scrounging for change in couch cushions to fund their next meal - have turned to a life of crime to cope with the steep prices, according to one student eyeing the bread selection last week.

"I've seen students in the cafeteria steal whole loaves of bread because they can't afford to buy it," said Leslee Everett, a sophomore at Temple University whose parents can still be proud of their daughter's honor. "I, on the other hand, am forced to go home and stock up on groceries in Scranton, Pa., and bring them back."

Staff writer David Foster contributed to this report.