Inflation is here. Beware.

If we decide to have pizza, we always go to Bene, and have their Mediterranean, which used to cost $18.50. Last week it was $19.75. A significant jump in the price. The croissants at our neighborhood grocery store, Market of Choice, look a tad smaller than before. I think they are trying to maintain the price the same, but are actually delivering a little less to account for inflation.

Well, Daniel Gross explains:

[producers] have been able to pass on only about 60 percent of their higher
costs to consumers. The result has been sharply lower profits. .... many
companies have reached their limit in absorbing higher costs. That is why we've
had large bankruptcies in the restaurant industry (Bennigan's), and in
retailing (Linens 'n Things). Today, every company is faced with a choice of absorbing the higher costs passed on to them by suppliers or passing them on to consumers. Many companies are choosing the latter course. Airlines are furiously tacking on
charges for luggage, food, drink, blankets, and pillows. Hershey's, complaining
of costs for sugar and other commodities that have risen between 20 percent and
45 percent so far this year, in August announced a 10 percent price increase. Frank Bruni reports in Wednesday's New York Times that restaurateurs are
substituting cheaper goods (shiitake mushrooms instead of morels, lump crabmeat
instead of jumbo lump crabmeat) and keeping the prices steady. When you pay the
same for smaller portions or for goods of lower quality, that's inflation.