Retail food prices in the Washington area rose 2 percent last month, reflecting the end of the summer's great supermarket price war.
Washington's price rise was the largest in any city in the nation and nearly double that in the No. 2 city, Pittsburgh, where food prices rose 1.3 percent in August, the Labor Department reported. Nationally, food prices rose 0.4 percent in August.
Labor Department economist Floyd Rabil attributed most of the August price increase here to the end of the supermarket price war.
Rabil said, however, that the jolting price increases may not mean that food is more expensive here than in other cities. Washington "may be just getting back to normal," he said.
"We're going to return to our normal pricing practices," said Ernest C. Moore, a spokesman for Safeway Stores Inc. "We're going to be competitive in any case."
"We had to raise some prices in the last month, but we never presented the summer discounts as a freeze," said Susan Portney, a representative of Giant Food Inc. The higher food costs "will be our normal pricing," she said.
Giant and Safeway control more than half the supermarket sales in the Washington area.
Giant maintains that its prices are still in line with the bargain supermarkets such as Basics that introduced warehouse pricing here. Those discount markets have raised their prices, too, Portney said. Average food prices are still lower than they were last March before the price war began, she added.
Prices of some fast-moving items at Safeway such as canned tuna, bread, house brand ice cream, shortening, detergents, cereals and milk, which were the main armaments in the food fights, are being raised because the chain was selling them below cost and consequently losing money, Moore said. Those items were selected because shoppers are particularly price conscious about them, Moore said.
Some other items throughout the store are still being sold at low cost, but Moore said "we just can't afford to sell" some high-volume items cheaply "and stay in business."
The impact of the supermarket price war began to lessen in July when food prices rose 0.3 percent after dropping in each of the previous four months. Before the start of the price war last spring, retail prices had risen one-half of one percent in February and March after increasing 1 1/2 percent in December and January.
Giant started the warehouse pricing campaign in April and cut the prices of about 1,500 grocery items. That move set off what Giant has characterized as "a wave of competitive price-cutting in the Washington and Baltimore markets."
Safeway and A&P soon followed suit. But when company profits began to fall so did warehouse pricing signs in store windows. Last month, Giant reported its first loss in more than a decade.
As a result of the drop in profits, Giant, Safeway, Grand Union and Memco asked their employes to waive a raise this year. The union representing the local supermarket workers rejected that request.
During August, prices rose sharply for cola drinks, oranges and seafood, the Labor Department said. The largest price increase was for fruits and vegetables, which rose 4.4 percent during August. Dairy products increased 2.3 percent and meats, poultry, fish and eggs rose 1.2 percent.
Prices on cereal and bakery products dropped by 2.7 percent last month. Stores used the staple as a prized weapon in the price war because consumers are sensitive about their costs. But their prices are expected to rise soon, Moore said.
Other nonspecified foods rose 3.5 percent during August, the Labor Department said.