A Little Slice of New York-Style Inflation
Friday, May 13, 2011
When it comes to New Yorkers, they intimately know the price of three things: rent, subway fare and the price of a slice of pizza.
With inflation steadily rising across the nation and in New York, higher prices for that slice could soon be on the menu.
WNYC's Slice Index is a back-of-the-napkin check on the average pizza cost. As of May 13, it stands at $2.46, unchanged since last month.
While consumers aren't paying more, pizzeria owners are. Giorgio Giove of Brothers Pizza in Staten Island said prices have increased for almost every ingredient in the past year: olive oil, cheese, flour, pepperoni and chicken.
But Giove plans to keep prices the same for his customers.
"We're struggling a bit because of the prices, but we don't want to hurt everybody else," he said. "We're taking that loss."
It's a problem many companies are facing. In the last year, wholesale prices have jumped 6.8 percent while the prices consumers pay have only gone up 3.2 percent. Business owners like Giove are often eating the higher costs and seeing their profits squeezed.
Various pizza ingredients are among the items that now cost more.
In the last year, the price of flour products has increased more than 23 percent, according to the Bureau of Labor Statistics. At the same time, natural cheese prices have gone up 12 percent. And that cardboard take-out box, it costs more too: the price of paper boxes and containers rose 4 percent.
David Richardson, an economist with the Bureau of Labor Statistics, warned that pizza ingredients are only a small part of total cost of the pie. Labor, rent and energy all go into making pizza. Gas prices are now $3.97 a gallon on average, up $1.06 from a year ago. In New York City, according to the Energy Information Administration, a gallon averages $4.07.
Giove said the last time he had to raise prices – a 25 cent increase for a plain slice – was nearly two years ago. Back then, he was also trying to cope with higher costs to make his pizzas.
Cosmo Tiso, owner of Louie & Ernie's Pizza in the Bronx, also said he won’t increase his prices despite the higher costs.
"Gas prices go up and down, but we can't change every time too," he said.
Source: Bureau of Labor Statistics
(Graphics Stephen Nessen/WNYC)