In July our fast moving consumer goods price inflation tracker registered a monthly high. Year over year prices increased 13.0% the highest reading since we began tracking prices. Since our July report, just two weeks ago, we have noticed several interesting trends emerging in the market that will have a significant impact as we head into Labor Day.
A New Area of the Store Leading Prices Higher
Throughout most of the summer the Frozen department was leading prices higher with increases of 13-17% year over year. In Mid-August we have noticed a significant shift with Food prices now rising faster driven by Breakfast, Cookies and Snacks.
Changing Promotional Behavior
Promotion frequency continues to decline year over year, but we are seeing an accelerating return of promotion depth of discount. Promotion depth of discounts were the most aggressive we had seen all year in July and this trend is continuing in August with depths of discount 5-10% more aggressive vs. prior year.
Geographic Price Inflation Trends
Throughout most of the Summer out of stocks and price increases were the highest throughout most of the South and Texas. In recent weeks prices have started to rise quickly in new states such as Colorado, Utah, Wisconsin and much of the Great Lakes. Prices in these states are up 13-16% year over year
A New Pricing Leader?
Since the beginning of the pandemic a group of retailers have been raising prices significantly slower than the rest of market and improving their price position. Throughout late 2021 and early 2022 they were increasing prices 2-3% slower than the rest of market and driving huge price position gains. In the last 11 weeks one of the world’s largest retailers and traditional pricing leads is now closely tracking the market and seeing their price position slightly worsen for the first time in over a decade. Reach out to Engage3 to learn more about how we can help you track competitive pricing strategy shifts.
Given the dynamic nature of inflation trends frequent competitive pricing data and a ML based optimization engine are critical to protecting your Price Image.
Source: Engage3 Pricing Database, NielsenIQ and IRI Total Store View (TSV)