Egg Prices Soar, But Grocers Keep Them Low to Attract Shoppers
Egg prices have reached record highs and are projected to continue rising. However, shoppers are still paying significantly less than grocers, who are absorbing the increased costs.
Wholesale egg prices have hit $8.15 per dozen, the highest on record since 1985. Despite this, supermarkets are selling large Grade A eggs at an average of $4.95 per dozen.
Why Grocers Are Not Passing on Costs to Shoppers
Grocery stores are not fully passing on their costs to shoppers because they want to keep eggs, a staple food item, as affordable as possible to encourage repeat purchases.
Strategies to Keep Shoppers Happy
Grocers are using various tactics to maintain customer satisfaction:
* Loss Leaders: Eggs and milk have long been loss leaders, sold below wholesale cost to attract shoppers.
* Promotions and Loyalty Programs: Grocers may limit discounts and offer loyalty rewards, such as discounts on eggs for members with a minimum spend.
* Stockpiling Limits: To prevent empty shelves, some supermarkets are imposing limits on egg purchases.
Reasons for High Prices
The recent surge in egg prices is primarily due to an outbreak of avian flu. Since February 2022, nearly 158 million birds, including egg-laying hens, have been affected.
Impact on Supply and Demand
The avian flu outbreak has decimated egg-laying flocks, creating a supply shortage. Demand remains strong, particularly with Easter approaching.
Future Outlook
Egg prices are expected to continue rising as the avian flu outbreak persists and rebuilding flocks takes several months. Despite shoppers indicating a willingness to pay between $3 and $5 per dozen, current prices are nearing the upper limit of this range.
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This article was written by a member of our content team.