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Reports indicate Kroger is losing its ‘fresh’ pricing advantage | Food Dive

Dive Brief:

  • Price checks conducted by Barclays in Nashville, Tennessee, found that Kroger has ceded its pricing advantage in perishables to two key competitors: Walmart and Sprouts Farmers Market.
  • When comparing a basket of 117 items, representatives from the investment firm found that Walmart’s “fresh” items were 6.6% cheaper than Kroger’s, compared to the Cincinnati-based grocer’s 3.6% price advantage a year ago. In a comparison of 130 natural and organic products, meanwhile, Barclays found that Sprouts Farmers Market had overtaken Kroger in natural and organic perishables pricing, gaining a 2.4% advantage. Sprouts had an even larger advantage in produce, with prices 25.5% cheaper than Kroger’s. Barclays also examined prices at Whole Foods and found the grocer to be narrowing the price gap with Kroger.
  • Kroger remains competitively priced on center store items, lagging Walmart 6.4% while beating Sprouts and Whole Foods on specialty items by 14.4% and 20.8%, respectively. Still, the firm expressed puzzlement as to why Kroger had ceded so much ground on perishables. “While [Kroger] clearly has a scale advantage in the commoditized categories — and could be using its scale to reduce prices — perishables drive frequency, so we are perplexed as to why the price gap would have widened vs. a year ago,” analysts wrote in a note to investors.

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Reports indicate Kroger is losing its ‘fresh’ pricing advantage | Food Dive.

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