The new year can bring a fresh start for many people and, unfortunately, higher prices on a number of consumer goods.
Commodity prices increased around the world in 2011, leading to hikes in everything from food to gold. On Tuesday, Starbucks said it will raise prices by an average of about 1 percent in the Northeast and Sunbelt regions of the U.S., Reuters reported. The price increase is due to increased costs from coffee, milk and fuel. In New York City, prices for a 12-ounce "tall" brewed coffee and latte drinks will each rise 10 cents. Prices for several other drinks will also increase, a spokesperson for Starbucks told Reuters.
Natural disasters, shrinking supplies of various materials, and other events could lead to higher prices for other products.
Some increases will be expected, like ever-rising gas prices, while others, like a potential 25 percent hike on tap water, are more surprising, according to Dealnews.
|Domestic and International Airfare|
Marshal Cohen, chief industry analyst with The NPD Group, said he has already experienced higher airfares in bookings for 2012. That's coupled with a slew of flights being dropped, he said.
"Many smaller markets are now having three daily flights cut to two or even one," he said. "That will drive fares up to those locations."
Travel to and within Europe will be hit especially hard. The European Union implemented a "green tax" to reduce emissions, levying a fee of about $15 per passenger, each way, for flights to the U.S. Fees on shorter flights within the European Union will be taxed slightly less, Dealnews reports.
Rick Seaney, CEO of Farecompare.com, agreed that domestic flights will be higher as airlines continue to reduce seat capacity and fuel remains stubbornly high.
However, there may be some price relief in international airfare because those tickets have already been quite high in the last 18 months and "demand has slipped a bit."
|New Digital Camera Models|
Digital cameras with new technology, such as high-end digital SLRs, will have higher prices. But on existing models, the prices will decrease according to the natural maturation of electronics, Cohen said.
Smartphones have replaced budget friendly point-and-shoot cameras, so manufacturers and retailers are focusing more on higher-end digital SLRs, Dealnews reported.
Tragic flooding in Thailand in 2011, which has killed 780 people, has also led to a shortage of some electronics products, like hard drives.
Dealnews expects continued shortages throughout the first quarter of 2012, when experts predict that production will begin to catch up with demand.
The consolidation of desktop features into monitor-integrated units, many with touchscreens, will drive desktop prices higher next year, according to Stephen Baker, vice president of industry analysis at The NPD Group. Dealnews said it expects average selling prices to increase roughly 30 percent on new desktops.
|Food for Home Preparation|
Food prices will jump in 2012 as the costs to harvest, transport, and store food will increase, and those hikes will be passed to consumers, said Cohen.
Food costs rose 6 percent last year and will likely rise at least 2 percent more in 2012, Dealnews reported. Increases are likely to affect food eaten at home, rather than at restaurants. There, those costs are easier to absorb when combined with sales of liquor, according to Harry Balzer, chief industry analyst for The NPD Group.
|Mobile Device Data Plans|
As carriers expand 4G services and move away from unlimited plans, data is set to become more expensive in 2012, according to Ross Rubin, executive director of Connected Intelligence at The NPD Group. This is a reversal of the usual trend, because data plans in the past have had a tendency to decline in price, Dealnews said.
Dealnews said fees for everything from dog licenses to vehicle registration may increase as municipalities continue to try to plug holes in their budgets. Parking rates and infraction-related fines are also subject to increase. In Chicago, a non-registered dog can already incur a $500 fine. Parking fines in Portland are increasing 18 percent as the city faces a $16 billion deficit in its transportation budget.
Water is one of the simplest commodities in the world but it is becoming more precious, said Cohen. inclement weather around the world is creating greater shortages. Moving water to places that are lacking it will also drive this basic element to become more costly, he said.
Dealnews reports that water rates in the greater Chicago area will increase by as much as 25 percent next year, while the parched high desert Denver market is set to rise an additional 5.5 percent.
Gas was already set to rise, but geopolitical issues in the Middle East are already set to exacerbate increasing gas prices.
On Tuesday, Iran's First Vice President Mohammad Reza Rahimi threatened to close the Strait of Hormuz, a small waterway that borders Iran, if other countries sanction his country's crude exports because of its nuclear ambitions. That could disrupt roughly a third of the world's tanker traffic and send oil prices skyrocketing, analysts say.
Iran holds the world's fourth-largest proven oil reserves and the world's second-largest natural gas reserves, according to the U.S. Energy Information Administration.
Next year may be another budget-breaking year at the pump, with prices once again topping $4 per gallon.
Since 2004, gas prices have risen an average of 93 cents a gallon between Christmas and the eventual peak the following year, and as much as $1.30 a gallon some years, according to Patrick DeHaan, senior petroleum analyst with GasBuddy.com. That could mean gas prices may come close to or higher than their levels last spring, when the Arab Spring and turmoil in Libya began.
Gold is set to achieve its 11th consecutive year of growth, according to Dealnews. Analysts expect the precious metal to rise about 12 percent next year, a conservative estimate. The past decade has had a 17 percent annual growth rate.
As the U.S. Postal Service may increase rates and eliminate one-day delivery to fill a budget deficit, FedEx and UPS are also expected to increase small package rates by 4.9 percent.
"Shipping too is directly related to fuel and transport costs," Cohen said. The loss of revenue for shipping companies and the increased cost of shipping creates a recipe for higher shipping costs all along the route, he said.