Living Paycheck to Paycheck Gets Harder

Marcia Watkis, far left, a volunteer at the Bedstuy Campaign Against Hunger, a food pantry that lets people in need shop for their own items, checks groceries for Merna Smith, right, in the Brooklyn borough of New York, Wednesday, Oct. 10, 2007. (AP Photo/Bebeto Matthews) (Bebeto Matthews - AP)

He said the last time he saw this was 2000-2001, when the dot-com bubble burst and the economy went into a recession after massive layoffs.

For now, low-price retailers are readjusting their merchandising and pricing.

Wal-Mart is becoming more aggressive on discounting. It announced Thursday it is expanding price cuts to 15,000 items, ranging from Motts apple juice and Progresso soups to women's fleece tops, heading into the holidays.

Family Dollar, whose food offerings were limited to candy and snacks until two years ago, has expanded its mix of groceries like fruit cups, cereal and such refrigerated items as milk and ice cream while cutting back on shoes. This summer the chain began accepting food stamps.

Food pantries are also getting creative. Samuels said her church, Full Gospel Tabernacle of Faith, just started offering free cooking classes to teach clients who are diabetic or have other health conditions how to prepare vegetables like squash. It's also offering free exercise classes.

"We are trying to make them health conscious," Samuels said. "It's not right to give them just anything. Our mantra is eat well and live well."

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Associated Press Writers Geoff Mulvihill in Mount Laurel, N.J., and Terry Tang in Phoenix, Ariz., contributed to this report.