Gift Cards Get a Grip on Growing Grocery Prices

Anyone who’s shopped at their local supermarket over the past several months has discovered that food prices have been skyrocketing. According to a March 2012 report in Forbes Magazine, while overall U.S. food prices rose about 5 percent last year,earlier that year, food inflation was the highest recorded in 36 years. The U.S. Department of Agriculture sees food prices rising 2.5 - 3.5 percent this year, but many economists and industry-watchers believe prices could go even higher.

For example, food industry giant Kraft Foods raised prices 7.6 percent worldwide in the fourth quarter of 2011, and since March, produce prices have risen 50 percent. CNBC reported in 2011 that “surging food costs are causing consumers to get gored at the grocery store."

What’s going on, many consumers are asking. There are several factors that are causing these price increases. Some are global in nature; others closer to home.

China and India, with the largest and fastest growing populations, are creating demand for food from around the world. Poor weather in many growing areas around the world –the U.S., South America, Australia and Russia – has resulted in crop damage, and reduced yields.

Here in the U.S., government subsidized and mandated ethanol use has increased the demand for corn, reducing farm acreage previously dedicated to food, which has pushed prices up on a wide range of products, including meats, grains, and dairy products. In some areas suffering from lack of rainfall, farmers are being paid by the government not to plant crops in order to save water. The overall rise in energy prices – particularly for gasoline and diesel fuel - has made it more costly to transport goods from farm, to processor, to wholesaler and ultimately, to grocer.

With grocery costs taking a bigger bite out of the family budget, companies looking to recognize employees or build customer loyalty may want to consider gift cards from major food retailers such as Target, the SUPERVALU family of stores, the Safeway family of stores, or Whole Foods Market – all part of the National Gift Card partner network. It’s a gift that will be used and appreciated any time of the year.