Higher food prices stick despite lower gas costs

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Sticky prices are lining the aisles of your favorite grocery store. That's when prices go up but don't necessarily drop again.

Now store owners are defending their stickiness.

They blamed high gas prices for high food prices, but now that gas prices are going down, why not your food bill? University of California San Diego economist James Hamilton says there's generally a delay between the change in prices and fundamental conditions.

"Part of it may be a concern that some customers would be upset actually if you changed the price every single day, so firms are trying to smooth out those changes. That's part of why we see the stickiness we do," he explained.

"We don't see prices change every day even though there's some news every day that might make you think the price could change. There's some reluctance to pass on costs when they go up and reluctance to lower the price when the costs go down," he said.

Other economists say once a price hike is in place, it virtually never goes away. Companies also pay more attention to what a competitor is charging than to ingredient costs. Also, they aren't going to give up a profit if they don't have to.

E-mail: mrichards@ksl.com