After Gas Pains, Consumers Hit With Skyrocketing Grocery Bill

The price at the pump is painful, but the agony doesn't end there.

Faced with soaring shipping costs, food suppliers and manufacturers are raising prices.

Now, a trip to the local supermarket can be as shocking as a stop at the gas station. According to the U.S. Labor Department, food prices climbed 3.9 percent last month. It's the biggest spike since November 1974.

For more than 50 years, Superior Bakery in Cranston, R.I., has supplied area supermarkets with bread, but the rising cost of supplies has forced owner Robert Cicerone to tighten his belt.

"The gas prices have hurt us immensely,” he said.  “It hits your traffic margin, your cash flow. Everything that comes in the door has a surcharge," said Cicerone.

Cicerone said he’s paying up to $1,500 a week more to fill up his 12 trucks was gas then he was 10 months ago.

The cost of sugar and flour has also increased, forcing this family business to implement a 6 percent price increase. Among other places, they deliver down the road to Ruggieri's Market, a nearly 100-year-old, family-run grocery store.

The store’s president, Peter Ruggieri, said it’s hard to pass the price increases on to customers.

"The consumer thinks it's the store at store level, that we're just price gouging,” he said. “But in reality, once again, we're working on a smaller percentage to try and keep the product moving, keeping it fresh. We don't like to see the high prices."

Continuing turmoil in the Middle East has raised fears that oil prices will continue to rise, increasing the burden on suppliers, manufacturers, supermarkets and ultimately beleaguered consumers.

“It trickles down everywhere,” said Lou Pelosi, a customer at the store. “ It goes down to the big guy right down to the small guy. It'll hurt us sooner or later and everybody cuts back that little bit.”

Laurence Kotlikoff, an economics professor at Boston University said it’s an across the board struggle, with each piece intrinsically linked to the next.

Boston University Economics Prof. Laurence Kotlikoff says it's an across the board struggle, each piece intrinsically linked to the next.

Energy sources are a key driver and Kotlikoff says an eye to the future will tell us much about price fluctuations today.

"There's always a calculation with those kinds of exhaustible resources as to when to sell it and so the future can affect the present in terms of the price so people can say 'look, I think prices in the future are going to be higher, demand's going to be higher, I'm not going to pump as much.' That makes prices today go up," said Kotlikoff.

And with prices rising, the cost of business means trickle-down economics is in full effect from the pump to the produce.