The Wall Street Journal this morning reports that in the post-pandemic world, as consumers wrestle with inflated food prices and the prospect of recession, one thing that shoppers are not finding are the discounts and sales that used to typify the supermarket shopping experience.
"With food inflation running at the highest rate in more than 40 years, American shoppers are finding less relief from deals like 'buy one, get one free' promotions, or 99-cent two-liter bottles of soda, according to supermarket executives and analysts," the Journal writes. "The frequency and depth of U.S. grocery-store discounts remain below 2019 levels, according to retailers, prompting grocers to run sales on less popular items, or lose money offering discounts on staple products proven to bring in shoppers.
"On average, 20.6% of food and beverage products were sold with price reductions in the third quarter of this year, according to research firm Information Resources Inc., down from 25.7% for the same period in 2019. Promotional levels are down from 2019 levels for all grocery categories except for meat, data show.
"Food makers, which typically provide funding to supermarkets to support discounts and special sales, said ongoing shortages and supply-chain problems are limiting their production and leaving fewer products available to be put on sale. Supermarket companies, already paying higher wholesale prices to keep their shelves stocked, are left to spend more of their own money to advertise and support discount deals, executives said."
- KC's View:
There is an argument that the elimination of many promotions, which encourage retailers to make money on the buy instead of on the sell, actually is a good thing for the industry. products will be carried because customers want them or because retailers believe that they will add to their mix, not just because there are promotion dollars supporting them.
That said, one-fifth of products being sold with price reductions - down from one-quarter a couple of years ago - may be a decline, but it still is a lot. So we have to be careful not to overstate the trend.