By Jeff Wells
Source: Grocery Dive
Grocers like a little bit of inflation in their business. Kroger CEO Rodney McMullen has said somewhere between 3% and 4% is optimal. That’s enough of an increase to pad out the top line, but not enough to send shoppers running for the hills.
But the sort of food inflation we’ve been seeing this year, which has crept up into the double digits in recent months, carries a significant amount of risk. Yes, those higher prices can boost sales. They can also push shoppers toward discount operators that are waiting with open arms.
As prices have gone up and up, I keep feeling like we’re going to see a mass exodus of consumers from the Krogers and Albertsons of the industry to retailers like Walmart, Grocery Outlet, Dollar General and Aldi. These low-price stores are everywhere now and, as Aldi has shown with its recent remodeling push, they’re targeting shoppers across income levels.