Egg Prices Surge to Record Highs, Retailers Employ Tactics to Keep Shoppers
Egg prices have reached unprecedented levels, with shoppers now paying an average of $4.95 for a dozen large Grade A eggs. Despite the surge, wholesale egg prices remain significantly higher, reaching a record $8.15 per dozen.
To maintain affordability and attract customers, grocery stores are utilizing various strategies:
Loss Leader Pricing:
Eggs, traditionally considered "loss leaders," are priced below wholesale costs to entice shoppers into stores. Despite recent price increases, retailers continue to employ this tactic to remain competitive.
Reduced Promotions and Discounts:
To offset egg losses, supermarkets are curtailing promotions such as "buy two, get one free." This strategy helps reduce costs without increasing retail prices.
Loyalty Programs:
Stores are offering loyalty programs that reward customers who spend a certain amount with discounted egg prices. This incentivizes shoppers to purchase other items and maintain loyalty to the store.
Inventory Management:
To prevent empty shelves and encourage customer satisfaction, some supermarket chains are limiting egg purchases per customer. This helps maintain availability and reduce stockpiling.
The Avian Flu Impact:
The avian flu outbreak has decimated laying hen flocks, reducing egg supply and contributing to price increases. With no end to the outbreak in sight, prices are expected to continue rising.
Demand and Supply:
Despite higher prices, egg demand remains high in the United States. The upcoming Easter holiday is expected to further increase demand, exacerbating supply challenges.
Consumer Behavior:
A recent survey indicates that two-thirds of shoppers are unwilling to pay more than $5 for a dozen eggs. This suggests that demand may eventually weaken if prices continue to rise.