The new grocery store experience: higher prices, locked merchandise

Feb 10, 2023, 4:00 PM | Updated: 6:47 pm

grocery store...

Grocery stores are dealing with tight margins as consumers face higher prices. (Photo by Brandon Bell/Getty Images)

(Photo by Brandon Bell/Getty Images)

The quick trip to your neighborhood grocery store is decidedly different these days, with certain items often locked behind glass cases and how easy it is to rack up a three-figure grocery bill.

Heather Lalley, Editor in Chief at Winsight Grocery Business, told Seattle’s Morning News that the entire industry is in flux.

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“We have these outside forces that are impacting things. We just saw the recent issue with eggs. They’re like $7-8 a dozen. And that was because of a variety of factors, including a big bird flu outbreak that impacted the supply,” Lalley explained.

“Then this all was laid on top of the fact that everyone wanted to do their holiday baking. And so there was a huge demand for eggs at the same time that the supply was lowered, driving a price crisis,” she continued.

Winsight Grocery Business is an industry news site. Lalley said stores are consistently battling a tight economy.

“The margins at grocery stores are so slim. So you know, that impacts things,” Lalley said. “Every item that is stolen has an impact on the bottom line. But retailers have said recently that they are seeing a massive uptick in retail theft. Target expressed this during their recent earnings call. Hundreds of millions of dollars both in-store theft, but also like organized retail theft online.”

Crime has become such a big issue that it’s hitting stores and, therefore, consumers hard. According to The Center for Retail Research, the most popular items stolen are packed meats, razor blades, and cosmetics.

“Walmart’s CEO recently said they might have to close stores that are so deeply impacted by crime because it is such a detriment to their balance sheet. So apparently, they are trying to do all sorts of things to mitigate this,” Lalley explained. “I would say those lock boxes, for me, are a bit of a turnoff if you’re busy, and you’ve got to get them to unlock your toothbrush. So I wonder, I wonder if in trying to preserve those sales if they are, in fact, losing sales at the same time?”

Lalley also told KIRO Newsradio that grocery stores have to redefine themselves in a post-pandemic world.

“We saw online grocery shopping and delivery just explode during the pandemic. Obviously, people were nervous and scared to go into grocery stores,” Lalley said. “A lot of those delivery sales have leveled off just as grocers are building up the infrastructure to make delivery more possible.”

Grocery chains now have a renewed interest in people shopping in their stores which Lalley said means the expense of updating comes into play.

“There’s also a much greater interest in folks who want to pull up into the parking lot and pick up their groceries. So that creates a whole other set of concerns,” Lalley explained. “So we’re seeing grocers invest in technology to make all of these different channels possible at the same time, but they are still dealing with labor issues and supply chain issues and all of these other competing things. So it is a time of great flux and change.”

The future of the grocery business will be dominated by large chains. Kroger and Albertsons, for example, are still moving forward with their merger despite the efforts of state attorneys general, including in Washington.

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The Federal Trade Commission continues to review the merger. According to sources cited in a Reuters news article, the companies are planning to sell up to 300 stores in a move to dispel antitrust concerns.

However, there is a new group of private consumers suing to stop the deal and the $4 billion dividend for shareholders.

“It is interesting to see consumers expressing themselves. I tend to look at it as the next iteration of a petition like we are protesting this; we are vociferous in our opposition to this merger,” Lalley said. “I don’t know that we’re going to see it go really far or have a huge impact. Of course, this is being investigated by all levels, federal and state governments. I don’t know that this consumer lawsuit, however, is going to have a huge impact on the outcome.”

Listen to Seattle’s Morning News with Dave Ross and Colleen O’Brien weekday mornings from 5 – 9 a.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

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