These days, Americans pay more to survive and less to thrive.
From the price of fruit at the local market in Kennett Square, to a prepared meal from West Chester, prices are higher than ever for food, gas, electricity – just about everything.
“Inflation is destroying the hospitality industry in many ways,” said Domenick Savino, managing partner of The Drexelbrook, a popular hospitality and event center in Drexel Hill. “Prices fluctuate daily in the commodity market so it is a real challenge when booking future events to quote and meet prices for 2023 and beyond.”
“For us in the private events industry, we honor the contracts signed two years ago with the prices. Now, with the serious increase in the cost of goods, it really takes some of the bottom line away,” Savino said.
Inflation rose 11.3 percent last month at the wholesale level compared to June 2021, as previously reported. The U.S. Department of Labor announced Thursday that the U.S. producer price index accelerated to the fastest pace on record, up 11.6 percent in March.
“We have removed certain items from our menus, mainly crab, lobster, premium meats or included them in the ‘market price’ which will be determined closer to the date of the event. Inflation also affects salaries and wages, as inflation increases, so does the need to increase the wages of employees,” said Savino. “On the other hand, it is very difficult to beat inflation on menus. So for small businesses this is a crisis situation.”
Yet even more than food, there is a steady increase in energy prices in southeastern Pennsylvania and elsewhere.
Gasoline prices continue to rise dramatically, although recently prices at various Chester County gas stations have dropped to just under $5 per gallon.
“Absolutely ridiculous, a quarter of my salary, if not more, shouldn’t be going on gas every week,” said Diedra James from Oxford.
Of course, with inflation continuing to rise in America and rumors of a recession running from Wall Street to Main Street, some observers expect gas prices to hit $5 locally by the New Year.
“Being a contractor, gas prices affect vehicles and equipment and recreational activities like boating,” said Landenberg native Brett Meyer of Franklin.
Next year, average global refining margins are expected to exceed their five-year average, although “not nearly as strong as in 2022,” analyst Alan Gelder of Wood Mackenzie, a research firm, said in a June Reuters report.
Inflation broke a 40-year record of 9.1 percent in June, the largest annual increase since 1981, according to the US Consumer Price Index.
Almost half of the increase is due to higher energy costs, as previously reported. Inflation continues to weigh on Americans’ household budgets while simultaneously pressuring the Federal Reserve to raise interest rates aggressively—startling trends that increase the risk of a recession.
“Inflation has forced us to change our habits,” said Landenberg resident Barbara Croyle, founder of AgingConfident.” We no longer shop or go out to eat and are careful about what we buy in the store. It has the biggest impact on food.”
The Landenberg resident said her family is upset “we can’t support local business like we have in the past.”
Although Croyle added that gas is also an issue, she drives a Prius and is therefore able to get around.
June prices rose sharply from a year earlier, with gasoline up 59.9 percent and fruits and vegetables up more than 8 percent, according to the US Bureau of Labor Statistics. The price of grain has increased by more than 15 percent compared to a year ago. At the national level, even the price of flour increased by 5.1 percent.
“Inflation is not Putin’s fault,” Croyle said. “Out-of-control government spending and bad Federal Reserve policy are entirely to blame.”