We’ve all read the headlines if not experienced it firsthand as consumers or sales and marketers the supply chain issues that continue to plague the consumer-packaged goods (CPG) industry 20 months after the onset of COVID-19.
An expected consequence of this disruption is increased costs throughout the supply and demand chain, from raw materials to labor costs to increased costs of pallets and containers, and increased fuel and delivery charges. The trickle-down effect is higher retail prices being passed on to the consumer. There is simply no way around it in an industry where margins are already razor thin.
Large retail chains with tremendous buying power and negotiating muscle might be able to deflect some of these increases, but the independent mom-and-pop operator doesn’t stand a chance.
National Retail Solutions Inc., which operates point-of-sale (POS) terminals in over 12,000 independent retail outlets took a deep dive into the sales across their network to see how retail pricing has changed.
Based on 12 weeks ending Oct. 23, vs. year ago (YAGO) in same stores scanning – 464 of the Top 500 items sold across the NRS network experienced a price increase. Across the Top 500 items, ranked based on latest 12 weeks quantity sold, the average price increase was 4.1%.
Categories with average retail price increases greater than 10% were:
- Hot sauce/chili condiments
- Malt based alternative BEVAL
- Coconut Water
Categories with greater than the 4.1% average but less than 10.0% increase were:
- Cigarettes and Smokeless TOB
- Anchovy & sardines
- Non-Alcoholic Beverages (all Categories)
- Flour & meal
- Prepared cocktails
Only three categories reflected price decreases:
- Pipe Tobacco,
Pipe tobacco notably sold 5.2% LESS THAN year-ago prices.
Every day there is a new announcement of price increases, with CPG leaders warning of more to come.
Although 93% of the Top 500 items experienced a price increase vs. YAGO, higher prices did not translate to lower sales for the majority of these products. In fact, 75% or 374 or the Top 500 saw sales quantity increases vs YAGO in same stores scanning.
Silliman is senior vice president of data strategy and sales at National Retail Solutions. For more information contact her at [email protected] or visit nrsinsights.com.