CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
The cost of food at the grocery store has gone up 1.3 percent this year, according to federal statistics.
FOOD: It's getting more expensive in Honolulu to do business in the food industry, but those price increases aren't necessarily getting passed on to the consumer. Consumers save
Paying the price
at grocery storeClothing stores don't see hikes
By Dave Segal
dsegal@starbulletin.comThat's the consensus of several local food executives, whose opinions contrast with a semiannual Honolulu consumer price index released yesterday by the Bureau of Labor Statistics.
The federal report showed that the cost of food and beverages rose 2.4 percent during the first six months of 2002 from a year ago. The figure reflected a 3 percent increase in the cost of eating out -- a big jump considering the struggling economy. The cost of eating at home rose just 1.3 percent.
"In my instance, we haven't raised prices in eight years," said Fred Livingston, who owns Don Ho's Island Grill at Aloha Tower Marketplace, Sunset Grill at Restaurant Row, The Crouching Lion Inn at Kaaawa; and Matteo's Italian Restaurant, Trattoria and Davey Jones Ribs in Waikiki.
"There have been several well-known national restaurant franchises that have opened in Honolulu that have added to the dollar amount being spent," Livingston said. "But theoretically you have a certain size pie. So that doesn't mean more dollars but rather you're dividing up the pie into smaller pieces. I think more people are eating out because (of the new restaurants), but I don't think people have raised their prices."
Livingston said he's held the line on prices despite an unfavorable business environment. He said the cost of medical insurance for employees has gone up 20 percent this year. Livingston also cited this year's 50-cent increase in the minimum wage to $5.75 and the small tip credit that enables Hawaii employers to pay tip workers 25 cents less per hour rather than the $2 or $3 an hour less that he said is the practice in other states.
Then there's food costs, which Livingston said have increased for certain items.
"It's very seasonal," he said. "Davey Jones uses a tremendous amount of pork rib and it's been quite high. Lettuce has been very high, but recently not so high. Overall, though, I don't think our food costs have gone up."
Roger Godfrey, president of Times Super Market Ltd., said lower meat prices rather than competition within the food stores probably is one of the reasons why consumers who eat at home saw a smaller rise in costs. A year ago, prices rose 2.6 percent over 2000, twice this year's 1.3 percent.
"Meat prices are down substantially," he said. "The numbers I got yesterday show that beef is down 5 to 7 percent, poultry is down 9 to 11 percent and pork is down 15 to 18 percent. That's at least since the first of the year."
Livingston, who said he's paid higher costs for pork, said one can't compare supermarket prices to restaurant prices.
"A lot of times if you go in a supermarket, you can't buy the same quality of steak and ribs that a restaurant would give you," he said.
Kelvin Shigemura, vice president of Armstrong Produce Ltd., said on the wholesale level he thinks prices have been about the same compared with last year.
"As far as people eating at home or eating out, the price when you go out is already set and most food restaurants don't change their prices whether the price of the product goes up or down," Shigemura said. "On the retail side is where you get your flexibility, but as a whole we didn't see prices vary from the previous year. There have been spikes, but as a whole prices have been about the same."
Brian Christensen, president of the Hawaii division of retail food distributor Fleming Cos., said additional meat supply this year is the likely reason for the lower costs of those products. He said he's not surprised that the cost of eating at home has been relatively flat this year.
"We haven't had as much of an increase (in food costs) as we had in the past year," he said. "We also supply people like KFC and those meals are usually bought and taken home, and we believe their sales have been good."
Gregg Shimabukuro, director of purchasing for broad-line food service distributor Y. Hata & Co. Ltd., said he's seen an increase in both the transportation cost of goods and the prices of the goods themselves. Still, he said his company, which services hotels, restaurants, schools, prisons and military facilities among others, has been reluctant to pass on the increase.
"We've been utilizing a lot of technology and creating efficiencies that would allow us to retain our pricing to the customers," he said.
