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Business News

Shouldn't food prices have dropped when gas prices did?

The Tampa Tribune
Published:   |   Updated: March 19, 2013 at 11:03 AM

Q. Why, when gas prices dropped before from $4 a gallon to $3, didn't grocery prices drop too? What are the business owners doing with the record profits they make in situations like this, just like the oil companies did?

- ToiJo51 via TBO.com

A. Yes, there is a widespread belief that companies are quick to raise prices for gas or anything else and slow to drop prices.

Dan Manternach, an agriculture specialist with the Doane Advisory Services company, said it's impossible to know a store's true fuel cost without getting a peek at a grocer's private accounting books.

Publix is a private company, and Sweetbay, Walmart, Target and others don't disclose their fuel costs.

But from Manternach's perspective, grocery stores took a hit to profits last time fuel and food prices soared, and now "they're just recouping what they lost."

We asked Publix about gas and grocery prices. Here's what they said: When the wholesale prices of products such as cheese or bread jump, stores can try to even out the impact on customers - but only so much.

Publix and other companies with big truck fleets buy fuel in bulk for long-term contracts to help keep costs stable. Stores are also trying to save on fuel by loading trucks with more inventory and re-routing trucks so they never drive empty.

Last year, Publix decreased the miles their trucks travel by more than 28,000 miles per week.

Submit your question here or visit our Gas Prices page and retail writer Richard Mullins will get you the answer.

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