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Bloomberg - Eight-Cent Eggs: Grocery Prices Are Plunging


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http://www.bloomberg.com/news/articles/2016-09-27/eight-cent-eggs-consumers-gobble-cheap-food-as-grocers-squirm

Call it the Great Grocery-Store Giveaway of 2016.

 

In Austin, Texas, Randalls slashed prices for boneless beef ribs by 40 percent, to $3.99 a pound. Not to be outdone, the H-E-B grocer down the street charged $1 a pound less. Not long ago, Albertsons advertised a deal you don’t normally see on your finer cuts of meat: “buy 1 get 1 free” specials on “USDA Choice Petite Sirloin Steak.”

 

And what does $1 buy these days? In North Bergen, New Jersey, you could pick up a dozen eggs at Wal-Mart. OK, the price was actually $1.14. A mile away, check out Aldi, the German supermarket discounter, which can actually break the buck -- 12 eggs for 99 cents. A year ago, you would have paid, on average, three times that price.

Very interesting article on competition within the grocery sector.

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Thanks for sharing.

 

With Wal-Mart driving part of the cost cutting, are they employing a strategy where they lose margin or even lose money outright in their grocery stores while making it up by driving traffic to the rest of the store? Grocers have always been a low margin business, I remember reading a bit about Trader Joes and Aldi here in the US and I think the paper I read said their average store had between 3-5% margins which were considered high in the business can grocery-only stores compete or do they need to attach a high margin business to the store to actually make money. Publix is adding liquor stores to many of its locations, something I know Albertsons does as well.

 

As a consumer I always feel a little guilty eating lunch at various fast food/semi casual places where the price of a meal is often between $8 and $12. It seems like you can now put together a steak dinner with sides for less than the price of fast food for two.

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It depends what you buy I guess.  I regularly pay $6/doz eggs from a local farm where I know the chickens are outdoors all day running in the grass.  I pay more than $10 lb for grass fed beef, etc.  I don't think I'd eat a 8-cent egg from WalMart and the fact that prices of that factory farmed crap are dropping is probably an indication of the demand for such.

 

I agree about Whole Foods, when we go there it is to pick up 1 or 2 things we can't find elsewhere.  Anything that is also found at other stores is much cheaper at the other stores.  You rarely see someone there with a carriage filled with stuff the way you do at other grocery stores, and they don't even have large carriages.  I think they must survive on their prepared food sections, because you always see a ton of people eating there at the tables they have (inside and outside).

 

 

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While a small population do take advantage of the lower prices of certain everyday/promotional items, many do not. They shop according to their predetermined list.  While I understand the utility of the list, I think that's a mistake... people should buy what's on sale and then plan/adjust their meals to those sale items.

 

What are my qualifications? 4 years as a cashier at Whole Foods.  ;D ;D ;D

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