December 2022 saw one of the fastest inflation increases in history, with average prices paid up by 161 basis points and everyday prices up by 108 basis points. Depth-of-discount and promotion frequency are up YoY, but saw a significant decline vs. prior months.
Food feels the heat
The food industry continues to be the hardest hit by inflation, with a YoY increase of 16%, while non-edible items have seen a decrease in price increase rates compared to the previous year, hovering in the mid-single digits. Egg prices continue to skyrocket and should continue to trend upward in Q1 following the loss of over 100,000 chickens in a fire at Hillandale Farms, one of the top 5 egg producers in the US.
Store in trips decline
Consumers are cutting back on trips across channels, with Mass retailers being the only channel experiencing an increase in YoY trip frequency. Price increases by a Big 3 retailer, however, are outweighing the price decreases early in the year.
Out of Stocks
Out-of-stocks are increasing across the country, with overall OoS rates again climbing above 10%. Candy and Baking saw especially steep increases in out-of-stocks, surpassing 13%.
The International Inflation Landscape
Q4 2022 saw the US experiencing higher inflation than other developed markets. In January, Western Europe has now surpassed the US with YoY prices up in the low to mid-teens.
Omnichannel Competitive Intelligence and Pricing Science
Regardless of market factors and inflation, the right combination of Omnichannel Comp Intelligence and Pricing Science can help you increase your margin, maintain consistent revenue growth, and increase customer loyalty.
- Leverage omnichannel comp monitoring and Machine-learning powered Product Linking to track your product catalog against like-item competitive offerings and respond to competitors’ online and store-level tactics.
- Use Price Image to objectively identify the items that most directly influence customer perception, then optimize these items to increase trips and satisfaction while defending margin across the store. This approach balances short-term profit wins with long-term strategic success, boosting sales performance while addressing customer values.
- Balance short-term profits with long-term success by optimizing prices toward Price Image and boosting trip frequency and share-of-wallet.
Click here to access the full report and learn how Engage3 can help you develop winning Pricing Strategies that fuel growth in any market.