Rising prices hit city pockets hard

The increase commodity costs in such goods as corn, flour and dairy have increased operating costs and overall expense for local businesses. This development impacts local consumers when purchasing items such as bread, meat and pizza. New Pizza Town at 360 7th Ave. in Manhattan has felt the financial pinch from the increase costs of commodities. (Dennis W. Ho, Newsday / February 20, 2008)

As if New York prices weren't high enough, prepare to get nickel and dimed throughout the day on everything from your morning bagel to a beer after work.

Restaurants, bagel shops, pizza joints say that they have swallowed the rising costs on everything from flour to meat to delivery charges for long enough and are starting to raise their prices. Even New York's bellwether of cheap eats, the Recession Special at Gray's Papaya -- $3.50, for two dogs and a drink -- is preparing to jump.

"It has to," said owner Nicholas Gray.

Costs have gone up on mustard, buns, coffee stirrers, and sauerkraut. "It's every damn thing," said Gray, 71, who is agonizing over just how much he dare to ask from his customers. "I'm going to wear a black tie," he said. "I'm in mourning."

And there's no sign things will level off just yet.

The Labor Department reported yesterday that the Consumer Price Index, which gauges inflation, has risen 0.4 percent in each of the last two straight months, and was up 4.3 percent in the 12 months through January,

Across the boroughs, rising costs of grain, energy and other commodities have hit bakeries particularly hard.

"I just went up 5 cents and I'm thinking about going up probably another 10 cents," said Philip Romanzi, owner of Bagel Hole in Park Slope. Someone recently told Romanzi, who has been in business more than 20 years, about a $1.25 plain bagel in Manhattan. It sounded like an abomination. He had enough trouble getting his head around the 75 cents he's about to charge. Then again, his supplier has doubled the cost of a 100-pound bag of flour to nearly $40.

Wheat has risen to record prices because of disappointing crops around the world, said Ed Usset, a grain markets specialist at the University of Minnesota.

" North Dakota wheat is bagel flour," said Usset, who spoke with amNewYork while he was waiting for a flight in the Fargo airport where he had been briefing farmers on prices. "I bet the bagel eaters in New York don't think of it that way. High gluten, high protein flour for bagels. That crop is essentially sold out and we're only halfway through the marketing year."

"It's going to take a new crop worldwide and in the in the US to get us over this hump and that's a few months away," he said.

Far from Fargo, a block from Penn Station, Michael Fiducia, 26, was manning the register at New Pizza Town II during a lunch hour crush. "We used to have a girl here and I had to fire the girl," he said with a sad shrug. Rising costs also forced him to charge $2.75 for a slice a few months ago up from $2.25. "It's probably going to go up again this week to $3 a slice," he said.

The customers, employees from Macy's and Madison Square Garden, are not shy with their opinions of that. "I tell them when the gas goes up, the milk goes up, and when the milk goes up the cheese goes up," Fiducia said.

Around the corner on 31st Street, there were 100 seemingly happy customers at Café 31 enjoying a sit-down lunch. The accountants are the only ones not smiling, said co-owner, Paul Vellios. Like some others, he's paying more for meat and other products, along with the fuel surcharge from $4 to $7 that his suppliers demand on each delivery. Even the cost of a keg of beer went up $15 from some distributors. The restaurant has been holding out for months, but soon enough the menu prices are going to have to go up.

"Five, six or seven percent, just to absorb what we're absorbing right now," Vellios said.

Judith Norell now asks $2.40, up from $2.25 for a baguette at the Silver Moon Bakery on Broadway and 105th Street. Customers may say the chocolate tastes just as sweet, but Norell knows she's paying through the nose to have it shipped from Europe. She has juggled prices, increasing some and leaving others alone to avoid scaring away customers. She thinks her customers are doing juggling of their own, choosing her less costly items. "It's not going to get better," she said.

The price hikes are not limited to the pizzerias and bakeries. Pat McCluskey of Maspeth started clipping coupons and feels her purse get lighter and lighter every time she goes to the supermarket. Most of the added money goes to the gallon and a half of milk and seven loaves of bread her two, apparently ravenous, grown children go through. "My grocery bill has gone up at least $50 a week," she said.

Perhaps, people will eat less. Maybe grab a candy bar for a quick sugar rush in the middle of the day. Then again, Hershey announced a 13% increase in late January to offset the cost of cocoa, fuel, and transportation.

Marlene Naanes contributed to this story.

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New Yorkers are sure to feel the pinch of increasing inflation and rising grain prices from day-to-day, as many restaurants, delis, and bakery owners will be looking to pass their additional costs on to their customers.

BREAKFAST:

Bagel at Bagel Hole in Park Slope: $.75 - 15-cent increase

LUNCH

Burger at Café 31 in Midtown: $9.58 - 63-cent increase

SNACK

Slice of pizza at New Pizza Town II in Midtown: $3 - 25-cent increase

DINNER:

Baguette from Silver Moon Bakery on the Upper West Side: $2.40 - 15-cent increase

Total daily increase: $1.18

Related topic galleries: Midtown, Maspeth, Economy, Consumer Confidence, North Dakota, Park Slope, Macy's