General Discussion
In reply to the discussion: Grocers They Think Us Stupid Perhaps [View all]KurtNYC
(14,549 posts)They have target prices based on tons of consumer behavior data. They know how every price change will affect sales and profits. The personal discount cards (aka loyalty cards) track what you buy and trigger the coupons (for stuff you didn't buy) at the register.
Groceries subsidize the price of milk because it is a price that everyone remembers. Whatever the actual cost, they make milk just under $3 a gallon because the consumer thinks that is a good price and it creates a halo effect for other prices in the store. They can lose a little on milk because they make up for it elsewhere, the in-store bakery for example.
Groceries also decide what to shelve and what the range of options will be and most of them have a house brand which is made to their specifications by their major suppliers. Ice cream is a common item for grocers to offer in a house branded package and the ones in my area were right there with 1-1/2 quart packages (down from half gallon) when Friendly's and Breyer's cut theirs.
But I don't think it is greed so much as just trying to soften the relentless rise of prices as food supply is affected by drought, transportation cost and a rising population with less land and soil and less predictable weather.