While the overall BLS US CPI eased from a 40 year high, our fast moving consumer goods inflation tracker read a monthly high in July. Year over year prices increased 13.0% the highest reading since we began tracking prices. Promotions continue to disappear driving prices higher, but consumers are starting to see deeper promotion discounts. Traditional high-low retailers who saw their price position decline over the last 18 months fought back with deeper discounts in July to regain some of their lost ground.
All-Time High Inflation
Food price inflation notched an all-time high in Engage3’s inflation tracker driven by Consumables and Perishables both up over 15%. Frozen Foods continued to lead the way higher in Consumables with prices up nearly 20% due to a significant reduction in promotions. Many Consumable and Perishable categories are seeing promotion frequency declines of more than 20%.
Shifting Promotion Landscape
Promotions are continuing to decline in July, but depth of discount reached its highest level in 2022. In short consumers are seeing less promotions, but the promotions they are seeing are becoming more attractive. Promotion depths of discount however are still much shallower than prior to the start of the COVID pandemic. Due to large everyday price increase current promoted prices in many cases are similar to everyday prices consumers were seeing prior to March of 2021.
New Price Position Winners & Losers Emerge
Traditional price leading retailers like Target & Walmart are increasing prices slower than the market year to-date and continuing to improve their price position. In July, more traditional high-low retailers are increasing their depths of discount and regaining some of the price/value they lost over the last 18 months. Out of stocks are remaining low and these high-low retailers are using select deeper promotions to drive trips with cash conscious shoppers.
As the inflationary landscape continues to shift, high quality competitive pricing data is critical. Real-time competitive pricing data can help retailers track their price position and optimize prices. Brands can use this information to ensure their revenue management strategy is being properly executed. Engage3 Powered by Dexi offers the industry’s most complete and comprehensive omnichannel competitive insights to help retailers and brands win. Reach out to us now to book a demo to see how you can get high quality competitive insights immediately.