In this file:
· Supermarkets are losing the grocery price war
· Could in-store tracking technology change the layout of the grocery store?
Supermarkets are losing the grocery price war
Zlati Meyer , USA TODAY
March 20, 2017
Low food prices and razor-sharp competition are creating bargains for shoppers -- but killing profits for grocery chains.
"It’s created a price war among everybody. This is great news for consumers, but bad news for businesses who sell food," said Phil Lempert, a supermarket analyst who is the founder of supermarketguru.com, a Web site tracking industry news and trends.
At the same time, supermarkets are destroying their profit margins as they fight for new shoppers -- and fight off deep discounters like Walmart and online sellers.
It becomes a spiral. As food prices fall, retailers become more aggressive in trying to sell higher volumes in order to maintain revenue.
"To do that, they’re putting things on sale and getting people into the store and hopefully selling them more quantity,“ says Jon Stringer, retail editor at Supermarket News. "As long as sales are growing, you’re able to get a little more out of fixed costs.
Prices of supermarket items declined 1.3% last year, compared to the year before, says the Agriculture Department's Economic Research Service. It was the first annual decline since 1967. Just about every family will feel the impact since weekly household grocery expenses in 2016 were $107.34, according to the Food Marketing Institute.
Wegmans, a 92-store regional supermarket chain based in Rochester, N.Y., recently lowered prices on organic bananas from 69 cents a pound to 59 cents a pound. An 18-ounce jar of Wegmans house-brand peanut butter fell in price from $1.99 to $1.49. Prices on 40 key items, including beef, dairy and eggs, fell as well.
Wegmans executives say they had no choice.
"For us to be competitive, we’ve always had a commitment to our customers to have the lowest prices on products families use the most," explained Tom DiNardo, the chain's senior vice president of sales and marketing. "Everybody who sells food is our biggest competitor."
Costco has cut some of its food prices as much as half. A carton of 18 extra large eggs was $3.61 last year. It came down to $1.79. A three-pound bag of Kirkland Signature pistachios was $19.99. It fell to $14.99; Arm & Hammer liquid laundry detergent came down to $10.99 from $15.79.
Price deflation was to blame, according to CFO Richard Galanti...
Could in-store tracking technology change the layout of the grocery store?
Jeff Wells, FoodDive
March 20, 2017
Grocers are increasingly using in-store technology that tracks
customers as they move through store aisles, according to Progressive Grocer.
These programs show retailers where consumers travel and how long they spend in
According to industry sources interviewed by Progressive Grocer,
this technology can help grocers identify well-trafficked and under-visited
areas of the store. It can also determine where to place special endcap
displays, which items to cross-promote, and where to place signage.
· “In essence, these new technologies enable traditional grocery retailers to have the same level of understanding about their shoppers as online retailers such as Amazon,” Rajeev Sharma, founder and CEO of State College, PA-based VideoMining Corp., told Progressive Grocer.
Every retailer designs stores to be navigated in a certain way. But as in-store tracking technology grows, it will reveal fresh insights about how customers actually move through the aisles.
In-store tracking can show grocers which sections of the store are popular, of course. More importantly, it can reveal how customers prioritize their shopping trips...