cost increases

In a world of oversize food — genetically modified apples, super-size fries, and venti coffees — one thing may be coming up smaller: grocery stores.

According to the New York Times, grocers across the country from Safeway to Wal-Mart are turning to stores with smaller square footage. Supermarket retailers, like Jewel-Osco, who is building a smaller-format store in Chicago, are hoping to capitalize on an untapped segment of time-starved shoppers who are looking for an affordable meal to go without menu prices, or who just want to pick up a handful of grocery items.

These chains aren't shuttering the warehouse-sized predecessors, but hoping to gain market share as competition grows cutthroat. Both convenience stores and drugstores such as CVS are selling more groceries and fresher prepared foods, and British retail giant Tesco began stateside expansion last Fall.

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A while back, we talked about the rise of pickling and canning at home. But what happens once you've filled your pantry with homemade pickled watermelon rinds and apricot jam? Our friends across the pond have come up with a smart solution: organizing food exchanges.

London social enterprise group Growing Communities started the Good Food Swap, a popular event in which people bring items they've grown, foraged, or produced, and barter it for something else. Another unlikely participant in the food swaps are the local pubs. Sometimes it's even feasible to barter Sunday's catch at the lake for pints of beer.

The trend hasn't yet proliferated stateside, although certain food bloggers have also organized exchanges of local products such as preserves and honey. The concept definitely has appeal, given the rising prices of food. Everyone comes into the swap with a surplus of something, and leaves the exchange with a variety of edibles at no extra cost. I personally love the idea and think it's a win-win scenario. What do you think of the trend, and could you see it making headway in the US? Would you ever organize a food swap?

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Despite the soaring cost of food prices, fast-food chain Burger King announced that it will be adding two petite-sized, lower-cost items priced at $1.39: the Cheesy Bacon BK Wrapper and the Spicy Chicken BK Wrapper.

Burger King is attempting this strategy in a frenzied fast-food climate, as the industry is struggling to balance rising costs of food with value-added items. Fast-food companies such as McDonald's have had a difficult time keeping value items under the traditional $1 mark. Earlier this year, Burger King pulled a test for a double cheeseburger on its value menu for $1, and Jack in the Box just announced a new rollout of pita snacks, or "snack-sized wrap-style sandwiches" for $1.99.

I'm not sure that these tactics will be enough to excel in the current economic environment, but perhaps these changes will allow all of the fast-food chains to gain back some market share. What do you think?

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Earlier this month, Whole Foods reported losses of $18.4 million for its UK stores.

In addition to its domestic struggles, the Austin-based natural foods chain has been unsuccessful in its attempt to snag a piece of the UK market share. In the last year, the chain has opened six stores in Britain. The highly anticipated debut was a three-story, 80,000-square-foot emporium that opened on London's High Street last June.

So what went wrong? There are several factors: First, the company set up shop at a time when organic foods were still flying off shelves.

Since the credit crunch occurred, however, the country's sales of organic produce have fallen. Second, the organics industry is well developed and competitive in Britain, and existing stores such as Waitrose and Tesco have developed brand loyalty.

With the economy's downward spiral, it's unlikely that Whole Foods's problems will magically disappear. What do you think about the development? Are you surprised Whole Foods wasn't a success in the UK?

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Boston Market is the latest restaurant chain to succumb to sluggish spending. The Golden, CO-based corporation announced yesterday that it will offer a larger discounted menu of 11 meals for $5.

Boston Market joins a list of food chains — such as Subway, Quizno's, and Domino's — that have been promoting meals for $5. The company's chief brand officer, Judy Cantrell, said:

The $5 price point is an important part of the new vernacular in the restaurant industry. It’s become a price point that consumers respond to, and we see an opportunity to increase the quality of choices with our slow-roasted rotisserie chicken meals.

The value menu includes the chain's popular one-quarter rotisserie chicken, classic chicken salad, and rotisserie chicken pot pie, which come with a side dish and a drink. The company will promote its newly-priced menu with a TV commercial and online campaign. Will you try one of their $5 meals?

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For those of you who've raved about the Whole Foods private-label 365 brand, I've got good news for you: There are more of these brands coming your way.

Fellow grocery giant Safeway has plans to go national with two of its house brands, O Organics and health-conscious line Eating Right. So far, both lines have limited market, but will expand nationally this Fall. In the wake of the troubled economy, America's grocery giants have reported record sales of their own private-label brands.

The Safeway brands aim to be different from generic store brands. The New York Times explains that O Organics and Eating Right have been marketed entirely differently:

Both were built much more like name brands than like store brands ... Instead of competing simply on price they appeal to consumers who feel they ought to be eating better, but perhaps find the thicket of smaller, virtue-food brands confusing — or simply inaccessible.

I've tried the brands and think they're great — my cutie is a huge fan of the orange juice and the ice cream bars. Still, I won't be letting them pull a price trick on me. What about you — will you give the new brand a try?

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In a response to soaring food prices, McDonald's announced yesterday that it will be restructuring its dollar menu. This means swapping out the dollar menu's most popular items and replacing them with less-costly offerings. The company is testing changes to its $1 bestseller, the double cheeseburger. Chief Operating Officer Ralph Alvarez said:

The way the dollar menu looks today won't be the way it looks next year. . . . What fits on the menu will look different than now because it has to be profitable.

To offset the rising cost in cheese, which is expected to rise 21 percent this year in the US, many stores are using only one slice of cheese instead of two and touting the new offering as a "double hamburger with cheese." Other franchises have increased the cost of the double cheeseburger to $1.19.

If removed from the dollar menu, the double cheeseburger will be replaced by another burger. What do you think about the development? Will you be upset if the double cheeseburger is no longer a part of the dollar menu?

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On Friday afternoon I was in the ice cream aisle at my local grocery store. Since food is incredibly pricey these days, I was searching for the cheapest vanilla ice cream. As I reached for what I thought was the cheapest, my bff pointed out that it was actually a smaller container with a more expensive price tag! As we all know, ice cream cartons aren't the only items on grocery store shelves that are shrinking, and Time magazine reports on the growing trend:

Soaring commodity and fuel prices are driving up costs for manufacturers; faced with a choice between raising prices (which consumers would surely notice) or quietly putting fewer ounces in the bag, carton or cup (which they generally don't) manufacturers are choosing the latter. This month, Kellogg's started shipping Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks containing an average of 2.4 fewer ounces per box.

Other brands that are offering consumers shrunken products at unchanged prices are Tropicana, Wrigley's, Hellman's, and Country Crock. Have you noticed any of these smaller products at your supermarket?

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As someone who loves to bake, I was pretty bummed to hear that the price of flour is going up. We've been hearing about how grocery prices are going up due to increased prices of dairy and wheat, but this is the first time I've seen solid numbers. According to CNN Money, the price of a 50-pound bag of flour went from $16 to $37, a 131 percent increase. And if that's not crazy enough, sources say that the price may reach $40 next week.

The prices have been steadily climbing due to poor growing conditions including a US Winter freeze and a European drought. With prices reaching new records, it's not just the homecook who won't be able to afford anything. Increased prices means less profit margins for restaurants and retailers. Sooner or later, those price increases are going to be passed on to those of us eating the food. So start saving your pennies, that $2 croissant might just be $3 tomorrow.

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