Grocery prices surge amid product shortage

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Stevenson Ranch resident Vicki Rivera used to love going grocery shopping, opting to shop for each meal rather than getting all her groceries at once, but since the pandemic hit, she’s seen a change in her shopping habits.

“It used to be fun to go weekly, but now with the pandemic, not only does it feel like more of a hassle but it also feels like it’s been getting more and more expensive to shop for groceries,” Rivera said.

Grocery prices are soaring not only in the Santa Clarita Valley but also across the nation, with food prices reportedly rising more than 1% from just August to September, according to Consumer Price Index data, which measures the changes in the cost of goods and services in the U.S.

In 2020, the increase in food-at-home prices through the year was 75% above average, and those increases have continued into this year, with prices increasing 2.5% in 2021 thus far compared with last year and 4.5% higher in August than in the same period last year, per CPI data.

However, it’s not just food prices that are continuing to creep up, as overall inflation increased 5.4% from September of last year — the highest annual increase in 13 years, according to the CPI.

“Groceries are up and so is everything else,” said Holly Schroeder, CEO and president of the SCV Economic Development Corp. “There’s a lot of discussion on to what extent the inflation we’re feeling is temporary or permanent, and like most things, it’s likely some combination.”

Grocery prices from the Santa Clarita Valley in March 2020 versus November 2021.

Rising food prices in the SCV

When it comes to shopping for grocery list staples, prices are continually increasing. Protein-rich categories, like beef and veal, had the largest relative price increase, costing 10.5% more than they did last year, while the fresh vegetable category had the smallest increase of 0.6%, according to the U.S. Department of Agriculture’s Economic Research Service, noting that no food categories have decreased in price in 2021 compared with 2020.

Here in the SCV, a comparison of products purchased at the same local grocery store in Canyon Country in March 2020 to present revealed increases among costs, with the highest increase seen in ground beef prices, which rose 33% in the 20-month period, while vegetables and fruit remained the same price.

Causes of inflation are worldwide

While the price increases people are seeing at the supermarket started as COVID-19 took hold and caused widespread industry shutdowns, those increases have continued for a variety of reasons.

“There is definitely an inflationary factor affecting materials, including groceries. Groceries are not just what you’re eating, it’s all of the components that make up the food,” Schroeder said, noting that this includes packaging materials.

Restaurants, for example, have been having a hard time getting ketchup, not because there’s a tomato shortage, but due to the shortage of containers, Schroeder said.

Among the highest increases seen in food products across the SCV were whipped cream, 2-liter Coca Cola and pasta sauce, all of which increased by more than 25%, which could be attributed to shortages in the packaging items these products require.

And while food manufacturers were deemed essential, able to continue operating through the pandemic, COVID-19 still caused a labor shortage and the closure of food production facilities that resulted in production falling behind schedule, said Ali Naddafpour, College of the Canyons accounting professor and chair of the business department.

This, along with the fact that the shutdown also led to an increase in consumer demand for food-at-home, has resulted in an overall decline in inventory, Naddafpour added.

“I call this a ‘growing pain’ because we are growing, but we have to catch up with our past,” Naddafpour said.

As the holiday season fast approaches, Naddafpour said to expect empty store shelves as demand for product continues to increase amid a shortage of supply.

This is also due, in part, to the global disruption to the supply chain, as record demand for imported goods combined with capacity issues across the supply chain worldwide and the labor shortage have slowed distribution, causing massive delays at ports, such as Los Angeles and Long Beach, Schroeder and Naddafpour agreed.

“It’s the law of supply and demand: supply is less; demand is high. People want all of these materials but they are not available, so the price goes up,” Naddafpour said.

However, these are disruptions that, while Schroeder said may take a year, will eventually be worked through.

“It might feel permanent to people right now, but it will get back to equilibrium in the future,” she added.

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