Egg Prices Soar, Grocers Face Pressure
Egg prices have hit record highs, reaching $4.95 per dozen for large Grade A eggs in supermarkets. However, this price is still significantly lower than the $8.15 per dozen that grocers pay for wholesale eggs.
Grocers are not fully passing on the increased costs to consumers in an effort to keep eggs affordable and attract shoppers. They are employing tactics such as:
* Loss Leaders: Eggs are considered "textbook" loss leaders, priced below wholesale costs to entice customers.
* Limited Promotions: Grocers are scaling back discounts and promotions to offset higher egg prices.
* Loyalty Programs: Some stores are offering discounts on eggs for customers who spend a certain amount or participate in loyalty programs.
Avian Flu Crisis Drives Price Increases
An outbreak of avian flu has decimated laying hen flocks, leading to a surge in egg prices. Since February 2022, nearly 158 million birds, many of them egg-laying hens, have been affected.
Supply Concerns and Consumer Behavior
Egg shortages are a major concern for grocers, as empty shelves can lead to lost market share and credibility. As a result, some stores are limiting the number of eggs customers can purchase per visit.
Despite the higher prices, egg demand remains strong in the United States. Consumers are willing to pay a premium for eggs, which are a staple in many diets.
Outlook for Future Prices
Egg prices are expected to continue rising as the supply gap persists. The ongoing avian flu outbreak and strong demand contribute to the upward trend.
Grocers are likely to continue employing strategies to keep prices as low as possible while maintaining profitability. However, it is unclear how long these tactics will be effective in the face of ongoing supply challenges.