Tribune-Star/Joseph C. GarzaThe effects of inflation: Josh Moody, deli manager at Baesler’s Market, places fresh pieces of fried chicken onto the hot bar on Tuesday. The cost of the chicken used for the hot bar has increased but owner Bob Baesler has avoided raising the price for customers. Staff photo by Tribune-Star/Joseph C. Garza
Inflation is at a 30-year high, with prices rising 6.2% over the past year and no sign that it will ebb in the near future. Americans are getting raises and have plenty of money to spend, and combined with robust consumer demand, some businesses are raising prices.
But people in the Wabash Valley are feeling the pinch in a slightly different fashion than elsewhere in the country.
"The largest single component of recent inflation has been housing and energy," said Robert Guell, Indiana State University professor of economics. "The aspect of current inflation that is not observable locally is housing. Housing has gone up locally, but it's not like the scarcity in larger cities."
Guell continued, "The biggest, seriously problematic piece locally is the energy aspect — filling the tank, heating the home, keeping the lights on."
Bob Baesler, owner of Baesler's Market, can attest to that.
"We got our natural gas bill in September and it had doubled from what it was from September a year ago," said Baesler. "Natural gas had raised 75% from a year ago. I think October might be worse."
He added, "The news media have really got customers thinking that inflation is a problem, which it is, and I can't think of anything that has not been affected by it. The supply is not as great as the demand, and when that happens, the prices go up."
Baesler has experienced sticker shock on a couple of items in particular.
"With Tyson, two weeks ago we had a 28% increase on the raw chicken that we buy for our delis — that's very inflationary," he said. "The vegetable oil that we use in both stores in the delis was running about $1,200 a month. Two months ago, it jumped up to $2,400 a month. So vegetable oil doubled in price. I'm surprised that nationally, they say it's about 6%."
Prices at Baesler's aren't quite reflective of what's really occurring. "We've tried to keep our prices as low as we can — most of them we sit on for a while, and then we make adjustments," Baesler said. "Fortunately, again, to some degree, customers are expecting it because the news has played it out. That's people's number-one concern right now, even over COVID."
Guell said Baesler's observations reflect the fluidity of the food market. "Food issues are idiosyncratic to the product," he said. "Meat is higher than overall food prices."
Baesler said supply chain issues have also affected his stores.
"Certain items we cannot get," he said. "Some manufacturers have taken their slower-moving items and discontinued them so they can concentrate on their core best-sellers."
But there have been a couple of real head-scratchers in the supply chain.
"The one item that doesn't make sense and I have no idea why, but Frito-Lay corn chips are impossible to get, and it's been that way for weeks, going into months," Baesler reported. "Frito, two weeks ago, we had a thousand-dollar order and we got $400 worth because that's all he had."
Even stranger: "Someone called us to see if we could sell them ice, and I said yeah, and they said, they couldn't deliver to us because they said there was a shortage of water," Baesler said with a laugh. "I said, 'I think it's a shortage of drivers.'"
His customers aren't blaming the store. "We don't have the variety that everybody's used to, but fortunately everybody's accepting of the fact of 'if you don't have this, then I'll try that,'" Baesler said. "I feel very fortunate that our customers are so understanding of the situation."
Baesler pointed out an ominous aspect of inflation: "Very seldom do prices come back down, unless there's some sort of recession."
Still, he said, "It's going to get better, I assume."
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