Strapped processors aren’t offering discounts to retailers to pass along to customers.
Grocers are offering shoppers fewer discounts than they used to before the pandemic, in part because food processors aren’t giving them price breaks to pass along, according to recent sales figures.
Only about 21% of food and beverage products sold with price reductions in the third quarter, compared with 26% in the third quarter of 2019, the last full one before the pandemic hit, according to figures from IRI quoted in the Wall Street Journal. Retailers said that their discounts are smaller and less frequent than before the pandemic.
Processors typically give retailers discounts of 15% to 18% on selected items to pass along to consumers, according to an expert cited by the Journal. But due to supply-chain, labor and other problems, food processors aren’t giving reductions to grocers as much as they used to, leaving grocers who want to offer discounts to cut into their own margins to do so.
“It’s hard to run anything on promo,” the manager of a Chicago supermarket told the Journal.
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