Amazon, Walmart, and Target have realized their pricing mistake and are now slashing costs to win back customers. Amazon Fresh, a subsidiary of Amazon, announced that it will cut the costs of 4,000 weekly rotating grocery products by up to 30%. The discounts will apply to both national and Amazon’s store brands.
Following Amazon’s lead, Target promised to cut the prices of 5,000 items including diapers and pet food. The retailer rolled out its “dealworthy” discount brand in February, introducing 400 household and essential products mostly under $10. Walmart also announced that it would lower costs of 7,000 items, a 45% increase in price rollbacks. Aldi and Kroger both made moves to lower grocery prices as well.
These price cuts come after persistent inflation raised the cost of groceries 1.1% year over year as of April. That’s down 0.1% from March and significantly less than the 4.1% year-over-year price increase for food from restaurants, leaving retailers with an opportunity to take advantage on consumers’ increased reliance on groceries.
However, these big-box stores lowering prices wasn’t an altruistic move to throw customers a bone during tough times. Retailers have suffered from weak sales due to customers’ struggle with high prices. Target reported a 3.1% drop in net sales from a year ago and a 3.7% quarterly dip in comparable sales, marking its fourth consecutive quarter of declines. Though Walmart has continued to soar, it owes much of its 6% revenue growth to its e-commerce successes and wealthy customer base, the latter of which makes up a growing chunk of its audience.
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