In last year’s survey, 55% of retailers said the printed circular was “highly effective,” leading the FMI to conclude at the time that “despite longtime predictions about the demise of retail print circulars, this marketing vehicle is rated as one of the most effective tools.”īut this year, the percentage of printed circular true-believers slumped to just 38%. And other retailers who participated in the FMI’s survey are apparently considering the same. Kroger earlier this year quit distributing printed circulars via mail and newspapers in most of its markets. Some survey respondents said they are planning “circular pullback” in the year ahead, and some already have. Several survey respondents said they plan more “investment in base and promotional pricing,” otherwise known as lower everyday prices and more weekly deals.īut in order to afford lower prices, retailers are going to have to cut costs somewhere – and the traditional printed weekly circular seems to be a prime target. And only 12% expect that to change in the year ahead.Įven so, “food retailers are acutely aware of customers’ demand for value amid this inflationary environment,” the report reads. So retailers say their sales have actually dropped this past year as compared to the year before. Shoppers are spending more per trip, but buying less and shopping less often. Most told FMI that their higher shelf prices are barely enough to offset their own costs. So it would seem that retailers’ obvious response to lower-priced competitors would be to lower their own prices. “Customers will consolidate their shopping to the most inexpensive retailer,” another survey respondent observed. As a result, once-loyal shoppers are seeking out lower-cost alternatives. ![]() “Inflation has been killing the price image of our business,” one survey respondent said. “Price-focused retail channels” like supercenters, dollar stores and limited-assortment stores were cited more often as top competitors than in last year’s survey. Only 40% of grocery retailers considered other grocery stores to be among their top competitors. And those customers aren’t just going to other grocery stores. Some survey respondents expressed concern that their once-regular customers are shopping around more, looking for better deals. And some of those changes involve fine-tuning their pricing, offering less-expensive store-brand alternatives, and trimming costs by cutting back on printed weekly ads. ![]() So they’re planning some changes, to make sure their businesses aren’t negatively impacted as well. What the FMI found was that “retailers and suppliers expect inflation will continue,” and “consumer behavior will be negatively impacted” as a result. The latest edition of the annual report aims to find out what’s in store for the grocery industry by surveying 100 retailers who, together, operate more than 39,000 stores, along with 26 food product suppliers, responsible for nearly $300 billion worth of food product sales. Those are some of the many insights contained in FMI-The Food Industry Association’s “The Food Retailing Industry Speaks 2023” report. Retailers say they plan to offer more deals – they just won’t necessarily highlight those deals in printed weekly circulars anymore. It could be good news, bad news at the grocery store in the coming months.
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