The Brown & White

The Consumer Price Index for food is projected to increase 3.5 to 4.5 percent in 2008, as retailers continue to pass on higher commodity and energy costs to consumers in the form of higher retail prices, according to the United States Department of Agriculture Web site.

The increase in prices has forced Bethlehem food establishments to make adjustments.

Pizzerias are hit the hardest due to the increase in costs of wheat, flour, milk and cheese.

"We raised prices just a little bit and cut back on other things," said Joe Paiatzo, manager of Campus Pizza. "For example, we used to give out a side of ranch [dressing] for free. Now, it's 70 cents."

Paiatzo said he has also adjusted the prices of beverages in order to pick up the slack from the sagging economy.

But, not every establishment reacts to these inflationary changes in the same way.

Despite the current economic climate, George Lioudis, the manager of Lehigh Pizza, said he has not increased prices.

"I haven't increased them yet," Lioudis said. "I'm going to increase them in May. I try to keep it to once a year, but it's getting increasingly difficult."

Lioudis admits there are significant drawbacks to his business strategy.

"It's affecting my profit and my salary," Lioudis said. "We were busier last year than the year before, yet we made less."

Essentially, owners and managers are faced with two options: They can either sacrifice some of their profit in hopes of maintaining a steady flow of customers, or they can bend to the will of the economy and increase prices along with the inflation rates while risking losing customers.

Competition plays a part in making these decisions; both Paiatzo and Lioudis say they keep tabs on other pizzerias prices.

The issue is not if prices will be raised; rather, it is when and to what degree.

"There's no way around it, but we try to keep it as slow as possible," Paiatzo said.

Pizzerias are not the only establishments affected by the rise in costs.

The Cup, located in Campus Square, has also been forced to make some changes.

"I've been working here for five years, and we've had to raise prices three times," Elizabeth Shaser, an employee at The Cup, said. "We hate doing it, but we only do it if we have to."

Despite making these increases, Shaser said that she has not noticed a drop in customers or any significant negative effect so far.

According to The New York Times, prices are spiraling, and American retailers find themselves embroiled in a bidding war with overseas buyers for products ranging from milk to gasoline.

Paiatzo said he would not have entered the pizza business under the current economic conditions

"For anybody who opens a pizza parlor today, it's going to be very difficult," Paiatzo said.