Between the holiday wreaths adorning Front Street shops and the tall tree next to Elks Lodge, it’s beginning to look a lot like Christmas. But for some, the season may look a little leaner this year as residents and local businesses feel the costly effects of inflation during the holiday shopping season.
The current price hikes are the worst that City Market assistant store director Matthew Strickland has seen in his 10 years of retail experience. Large 20-pound bags of rice that cost roughly $25 a year ago are now sitting around $42. Many products that used to be in stock are now unavailable as companies “streamline their product lines” to cut costs, Strickland said. “Flavors of stuff that we used to carry, we just can’t get anymore.”
“I’ve never seen it like this,” he said. “We have price changes constantly, but (it’s) pennies up and down. But when you see something jump a dollar — for deodorant? It’s hard for everybody.”
The store’s prices vary based on costs from its wholesale distributors, like Anchorage-based J.B. Gottstein and Portland-based Western Boxed Meat. “We find out after we order what it’s going to cost,” Strickland said.
Increased shipping costs may also be a factor, but they are not the primary drivers of current price increases, he explained. “Our freight costs haven’t really gone up. It’s on the other end of the ordering. When our distributors’ costs go up, ours automatically go up.”
Some of the largest price increases have been in the baking and snack aisles, he said. They’ve been climbing “constantly,” he added, probably due to the holiday season.
Strickland is concerned that distributors are “pricing things out of purchase power,” he said. “People are not going to spend $8 on something they spent $6 to $5 on the week before.”
The rising cost of living can also affect businesses’ ability to attract and maintain a workforce. “When I was younger, it was awesome to make 10 bucks an hour,” he said. “Now, you can’t even hire someone at that price.”
Many factors are contributing to inflation, both at home and abroad. Russia’s invasion of Ukraine and global supply chain bottlenecks have pushed up prices, but are not solely responsible for the increases, according to Stanford economist John Taylor. He attributed current inflation rates largely to federal monetary policy in an interview with the Stanford Report.
Some major corporations are also using the guise of inflation to rake in record-breaking profits, according to the U.S. House Committee on Oversight and Reform. Shipping companies, meat processing companies and oil and gas companies have benefitted, the report said.
“It hurts. It hurts everybody,” said Strickland. “It’s hard for a business operating on such a slim margin to keep up with price raises and wages.”
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