NewsOriginals

Actions

Local discount store shows impact of higher prices on consumers

Store has overstock, returns for less than $10
Krazy Bins
Posted at 6:00 AM, Jul 23, 2021
and last updated 2021-07-23 06:50:51-04

MENTOR, Ohio — The Consumer Price Index (CPI) was higher than experts predicted again in June. When the CPI goes up, it can mean some day-to-day needs are more expensive.

Bill Kosteas, an economics professor at Cleveland State University, said the CPI has a trickle-down impact on household costs even though it does not factor in things like food costs.

"Traditionally what our understanding is that in particular, lower-and middle-income households get hit much harder when food, energy, the price of other necessities, as well as other basic goods services go up because lower-middle-income households tend to devote a greater fraction of their -- their spending and their income to those categories of goods and services," he said.

The need to make ends meet during the pandemic can be seen in the long lines formed outside Krazy Bins in Mentor.

The discount store is stocked with everyday items that are deeply discounted.

"We've gotten several boxes of diapers, baby items, clothes," said Donna Timberlake as she waited in line to go in.

These are things that can be tough to budget for when food, gas, and energy prices go up.

"Usually we're here about two o'clock in the morning," she said.

"We've just had a cult following," said Thomas Jager. "Our whole goal is to sell through all our inventory."

Kosteas said the long lines outside stores like Krazy Bins show what the consumer wants to buy.

"As your budget gets squeezed or as the prices of goods start to rise, people may become a bit more willing to trade-off convenience for a lower price," he said.

"A lot of people coming here for the rugs and the furniture and the pictures and things of that sort. And clothes, they have this discount on clothes," said Tangene Ownens after she finished shopping.

While this store is popular, the pressure to increase wages means fewer people will have to shop this way to get by but, "part of how much you shift your behavior, depends on whether you think trends are going to be short lived or long lasting," Kosteas said.

Although the costs of some goods and services are rising, he said the numbers aren't critical yet.

"The bigger concern, perhaps, is how sustained the rate of increase is going to be."