High costs of staple foods have caused people to spend less on luxury food items; that has put the squeeze on The Duck Blind Liquor.

Struggling liquor store The Duck Blind, located in the economic stronghold of Brentwood, Calif., has been experiencing a major decline in profits and diminishing sales. 

"Since three years ago, sales are down 35 percent, but it is gradually picking up," John Campbell, a manager at The Duck Blind, said. "It was a precipitous drop, but we are hoping that sales will increase by 10 percent during the upcoming holiday season."

The Duck Blind, which was established in 1951 and under its current ownership for the past 15 years, has never experienced such low profit margins. In fact, there has been a significant decline in demand nationally for items such as specialty wines and spirits that used to be the liquor store's primary means of profit.

"The higher price point items have just been sitting on shelves, while the lower end goods have been selling steadily," said Campbell.

Specialty liquors, imported cheese, and European cured meats have seen the biggest drop in sales.

According to the United States Department of Agriculture, overall food costs have increased 4 percent since last year.

Four main factors are seen as driving prices higher: weather, higher demand, smaller yields and crops diverted to biofuels.

The soaring costs of staple foods such as peanuts, corn and bread makes it less likely for consumers to splurge on high-end food and beverages such as fine wines and ports, imported cheese, cured meats, and caviar.

Forecasts were raised for meat, eggs, cooking oils, fruits and vegetables, sweets and cereals and baked goods as food inflation accelerated at the fastest pace since reaching a 31-year high in 2011, the USDA said in a report. Higher costs for corn, the primary feed for pigs and chickens, boost pork prices as much as 6.5 percent and eggs 4.5 percent. With the unemployment rate in California near 12 percent, less and less people are apt to let loose and enjoy the finer things in life.

Although they are still selling many bottles of wine, customers are reaching for the cheaper bottles.  

Campbell said, "the majority of sales happen from 3 p.m. to midnight, but sometimes even those hours feel like a ghost town here."

Still consumers are paying more for the basic necessities and less for luxuries.

It is a double-edged sword for fine wines, because they aren't selling as well and the cost of production of wine has greatly increased. Meanwhile, they cannot increase the manufactured suggested retail price.

The economy has decimated grape prices and stalled sales as harsh weather throughout many wine countries have made it tougher to produce good wine. During the boom years, many people were willing to pay up to $50 or more for a bottle of fine wine. But the recession began eroding the high-end market.

The end of the decline in sales is not in sight. Still, food prices are expected to rise 2 percent to 3 percent in the United States in 2012.

As for The Duck Blind, it is remaining hopeful that sales will increase this holiday season. 

Reach reporter Candice here.