Supermarket prices soared 1.9 percent last month in metropolitan Washington -- the largest monthly increase in 1978 and more than double the average for all U.S. cities -- and sent food prices 13 1/2 percent higher than they were a year ago, according to government figures published yesterday.
Higher beef prices in particular and increased demand for meats during the holiday season were among key factors in the food-price spiral here, according to spokesmen for the area's two largest food chains -- Safeway Stores and Giant Food.
There was no immediate explanation why area food price increases in December were more than double the average 0.8 percent increase for all other cities, however. For the year as a whole, food price increases averaged 12 1/2 percent in all U.S. cities -- one percentage point less than here.
Officials of Safeway and Giant emphatically denied some food industry reports that a sudden batch of wholesale price increases came after President Carter announced his anti-inflation guidelines on Oct. 24. Reportedly, food manufacturers and wholesalers raised prices in anticipation of some future price controls.
A spokesman for President Carter's Council on Wage and Price Stability said yesterday the government is aware of such reports and that any unwarranted price increases would be detected in a monitoring program scheduled to start next month. Large businesses must file by Feb. 15 data on prices in the 1976-1977 period, which the government will use for comparsons with prices starting in October.
Wholesalers in metropolitan New York have claimed that they faced a surge of manufacturer price increases after Carter's decision and one major New England food chain has advertised that it received too many sudden price changes.
Ernest Moore, spokesman for Safeway's area headquarters in Landover, said the nation's largest food retailer has "no reason to believe that the cost increases we are experiencing are anything but cost increase of suppliers."
At the same time, Moore said Safeway considers itself to be a "buying agent" for the consumer and the chain plans to challenge any wholesale price increases thought not be in compliance with price guidelines. Giant spokesman Barry Scher said his company's wholesale increases have not been "abnormal."
What was abnormal last month, according to statistics compiled by the Bureau of Labor Statistics, was a one month increase of 2.8 percent in retail prices for meats, poultry, fish and eggs.
Prices also rose for cola drinks, seafood, fresh fruit, bread and milk.
Meat prices account for about onefourth of the entire supermarket price index and beef prices alone jumped 14 percent in the first six months of 1978. With a reduction in beef supplies that began two years ago, the high demand for beef has pushed prices higher on a continuous basis and also had an inflationary impact on such product as cheese (a meat substitute) and milk, because of the higher demand for cheese.
According to Moore, of Safeway, wholesale beef prices rose 8 percent between November and December while pork Prices increased 6 percent, ground beef was up 9 percent and eggs increased 6 percent. Since last July, wholesale cheese prices rose 12.6 percent and, since last January, retail milk prices are up 20 percent to nearly $1.90 a gallon.
Giant Food's Scher also noted that there was a tighter supply of canned fruits and vegetables late in 1978 because of earlier crop failures, which also led to higher prices. Overall, fruit and vegetable prices here rose 1 percent in December, despite what the government described as a significant price decline for fresh vegetables.
Scher attributed most of the retail price increases Locally to such marketing costs as labor wages (up 94 percent since 1970), transportation (up 100 percent) and packaging (up 78 percent). In addition, he said energy costs have risen despite cutbacks in the use of resources.
One example cited for Giant was water and sewer rates from the Washington Suburban Sanitary Commission for stores in Montgomery and Prince George's counties. Scher said Giant had reduced water consumption at its stores from an average of 8,000 gallons a day to 2,500 gallons but that WSSC bills are up 46 percent from a eyar ago, starting this month.
Spending for food at grocery stores accounts for about 10 percent of the average Washington area family's overall spending, although the percentage is higher for poor residents.