A high-priced holiday season
Soaring prices affecting everyone, but food vendors see some of biggest increases
NEW YORK — Holiday celebrants in Hilo, Hawaii, might notice something different about the traditional Yule Log cake from the Short N Sweet bakery this year.
Maria Short typically makes her popular $35 bûche de Noël with two logs combined to look like a branch. This year, thanks to soaring prices for eggs and butter and other items, she’s downsizing to one straight Yule log.
“It’s the same price, but smaller,” she said. “That cuts down on size and labor.”
Higher prices are hitting everyone this holiday, but food vendors are seeing some of the biggest increases. Small businesses that count on food-centric holidays are bracing for a difficult season.
At the wholesale level, egg prices are more than triple what they were a year ago, milk prices are up 34%, and butter is up 70%, according to data from the U.S.
Department of Agriculture.
Businesses are also paying more for everything from packages to labor.
Many owners are raising prices to offset the higher costs.
But raising prices too much risks driving away the crucial holiday shopper. So, businesses are adjusting how they make products, changing gift basket components and adding free gifts instead of giving discounts, among other steps.
Maria Short says even for Hawaii, where the cost of living is among the highest of any state, the price increases are “drastic.”
For example, she says, the Short N Sweet Bakery is paying $123 for a case of eggs that cost $42 in October last year. A case of butter that was $91 in October 2021 is now $138 this year.
Among the ways Short is cutting costs, she’ll use a generic box decorated with stickers instead of using a customized box for her desserts. And she ordered a cookie printer rather than having bakers handpipe frosting, to save on labor costs.
Sarah Pounders, who co-owns Nashville-based Made in TN, a retailer of locally made food and gifts, says the local vendors who make the items she sells are facing higher prices. The cost of butter needed to make cookies is five times the price from a year ago and cardboard packaging is double.
Made in TN has raised some prices and is selling other items for less profit. Customers are already paying more for things like gas, clothing and cars, as well as services like eating out and travel, so they’re not as quick to spend as they might have been in prior years. They’re noticing the price increases, she said.
“If bread is up 50 cents, you will still buy bread,” Pounders said. “But if it’s an impulse buy or luxury specialty item — if chocolate-covered cookies are up $1 — you might think twice.”
Price increases aren’t an option for her popular gift basket business.
Corporations often have a $50 cap and events at hotels like weddings can have a $20 sweet spot. So, Pounders has made adjustments. In some cases, she has replaced a $20 bag of coffee, which is up $3, with less expensive hot chocolate. Or she puts one less chocolate bar in the basket.
She’s also buying more items that could sell throughout the year and less seasonal inventory like peppermint bark and hot chocolate on a stick.
“Every year is a guess, and the economy makes it even more volatile,” she said.