In lean times, shoppers see extra fat in food bill

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Veronica Banks, who lives outside St. Louis, said she suspects neighborhood corner stores are charging more for many items under the assumption customers won't pay the bus fare to go bargain hunting. Tom Seluzicki, a certified public accountant in Washington, said he assumes some food prices are artificially inflated to "compensate for lost margins on other products."

Without a doubt, basic economic principles account for most of the increase in the wholesale cost of food worldwide. Bad weather has hurt crops. Economic prosperity has driven up demand in developing countries. And soaring fuel prices have raised transportation costs. Mix in investors betting on continued food-price inflation and you have a recipe for a run-up.

Foodstuffs from rice to steak cost more than a year ago so much, in fact, that some consumers don't quite believe it all adds up.

But food retailers say consumers' suspicions of gouging are unjustified and that, if anything, they have refrained from passing along their extra costs.

"People have told me I nickel-and-dime them," said Kate Oncel, director of operations at The Brown Bag, a deli in Washington. "They don't understand the position we're in" of paying dramatically more for meat, produce, bread, packaging and deliveries.

Retailers raising prices and shoppers, in turn, raising eyebrows are reasonable and established responses, say economists and historians. While competitive pressures keep most businesses from taking advantage of their customers, some see an opportunity to push prices beyond justified levels.

"I like the beef rib-eye steaks," said Elbert Harris, a high school gym coach in St. Louis, who watched their price more than double to $12.99 a pound in the last 18 months.

Forgoing pricier items are adjustments many Americans can afford and stomach, especially relative to the crises in the more than 30 countries where food protests have raged.

But in the U.S., customers notice when the grocery bill stays the same but the take-home haul lightens. Conversely, most remain quiet when prices stay the same or drop.

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