High prices beginning to spread from gas pump

Consumers are beginning to feel the pinch of inflation at the grocer as well as the gas station. Items on the grocer’s shelves have to get there somehow, and they are usually transported by truck.
Although Oklahoma’s economy continues to outperform the nation as a whole with job growth and rising state personal income, the Consumer Price Index in March reflected inflation running at 4.0 percent overall.
The government does not provide state-specific inflation figures, but regional data shows prices rising most steeply in the South region, which includes Oklahoma, at 4.4 percent.
The share of total expenditures for households with income below $70,000 is 12.6 percent for food, according to a study published by the Oklahoma Policy Institute in May.
The latest CPI figures show food prices rising 4.5 percent over the last year. Dairy and related products are the single fastest-rising grocery items, with prices up 11 percent compared with a year ago, the Policy Institute’s study says.
The rise in motor fuel prices is the most visible component of the surge in inflation, according to OKPolicy.org. The March CPI reported a 26.4 percent increase in motor fuel costs compared to the year before. In 2005, gas made up 4.6 percent of expenditures for all households and 5.2 percent for lower- and moderate-income households.
MBM Corp. in Ardmore is a food distributor to restaurants. Steve Utterback, distribution center manager for MBM said he finds the cost of gas is affecting his business tremendously, and has found the need to pass some of that cost on to customers.
“We have to be more creative,” Utterback said. “It just narrows the profit margin for everybody — the amount of money that we have to give for raises — it’s being tight on everyone. I think the whole community is seeing the effect of it.”
Dana Chapman, general manager for DOT Foods, a food redistributor in Ardmore, said her company had probably 85 cents per gallon increase in fuel cost since the beginning of the year.
“We’re about $600,000 over budget year-to-date,” Chapman said. “We have put a strong emphasis on how we can become more efficient and measure our miles. We have had a huge emphasis on how we can reduce the wasted miles.”
DOT Foods works with a manufacturer and for the last couple of years, the manufacturer has been giving a surcharge for freight, according to Chapman.
“The fuel surcharge has helped,” Chapman said. “We have not had to raise our prices most times to the customer. However if rice goes up, we have to follow the market. Being in the redistribution business, we have not had to increase our prices to make up the loss we have on fuel, but we can feel the pinch of suppliers having to raise the price. What it does is it changes the food service market. Not as many people go out to eat or they are finding places that are less expensive.”
Sheila J. Robinson, 221-6536
sheila.robinson@ardmoreite.com