Gas Drives Up Prices of Big Macs, Pampers

Thursday, 28 Apr 2011 06:09 PM

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Americans are feeling the pain of higher prices not only at the gas pump but also at the supermarket, in coffee shops and restaurants — and even in the nursery.

The rising costs of gasoline and raw materials, coupled with a weakened dollar, have driven up prices for a host of everyday products such as diapers, toilet paper, gasoline, coffee, and McDonald’s meals (happy or not).

Gas prices are averaging $3.87 a gallon and have topped $4 a gallon in a number of states. As a result, businesses are passing on their increased shipping costs to consumers.

Pampers, rising prices, Huggies
The rising costs of items such as not only individuals but also charities such as Captain Hope’s Kids in Texas, which helps the homeless. (Getty Images Photo)
Diaper and paper products giants Kimberly-Clark and Procter & Gamble announced price hikes for their signature products of Huggies, Kleenex, Pampers, Charmin, and Bounty. For Kimberly-Clark, it was the third price increase announcement since March.

Kimberly-Clark CEO Thomas Falk, in announcing first-quarter earnings, acknowledged that the “rapid run-up in commodity costs” for such things as oil and wood pulp had hurt the bottom line and brought about the price hikes.

In addition to the hit that individuals take because of the economic turndown, a rise in diaper prices puts a severe strain on those helping the poor. The nonprofit Captain Hope’s Kids, which distribute diapers to homeless infants in North Texas, spends about $7,000 a month on diapers, WFAA television reported.

“We are very short, short on donations on diapers as well as what we purchase,” Captain Hope’s Kids Director Jeanne Reyer told the station.

Big Mac, McDonald's, price, increase
Big Mac attacked: McDonald's raises prices 1 percent. (Getty Images Photo)
Those looking for a quick and inexpensive meal also are encountering higher prices. The weakened U.S. dollar and rising oil prices contributed to higher costs for McDonald’s this year, causing the company to impose a 1 percent price increase. That translates to about a 3- or 4-cent increase for a Big Mac.

McDonald’s CFO Pete Benson cited the high price of oil, unrest in the Mideast and floods in Australia as factors in the price hike. It all adds up “to significant increases in three months in virtually every item in our basket,” the Chicago Tribune quoted him as saying.

Coffee, prices, increase
The worst part of waking up is the higher price to fill your cup. (Getty Images Photo)
Coffee prices hit $3 a pound for the first time in 34 years as result of poor harvests and growing demand, which, after dripping down to the consumers, means another 10 or 15 cents a cup or a couple more dollars at the market.

The rise in gas prices, up 81 cents since January, has caused motorists across the company to change a variety of habits from cutting back on driving and doing more carpooling to cutting back on other expenses and changing vacation plans. Gas prices are now at the highest level since August 2008, just before the Wall Street meltdown.

In a recent Washington Post/ABC News poll, 7 in 10 Americans said high gas prices were causing financial hardships. The prices are so high that drivers view a trip to the gas station like one to the dentist.

AAA Mid-Atlantic reported a spike in emergency calls from motorists who ran out of gas. In the District of Columbia, out of gas calls were up 39 compared to a year ago and up 36.8 percent in Maryland and Virginia. AAA’s John Townsend warns that there are risks to running on empty.

 “It can lead to fuel system damage that can cost you more in the long run,” he said. “In fact, running on empty or running out of gas may cause the electric fuel pump inside the fuel tank to overheat. The cost to replace this one component alone can be $500 or more in parts and labor.”

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