Who had “screwworm” on their supply chain scorecard?
As the egg industry gradually recovers from the prolonged impact of avian flu and egg prices have stabilized at the supermarket, the beef industry – with herd sizes already at record lows following drought across the Great Plains – is facing a new crisis that’s threatening to push consumer prices even higher in the grocery store meat case.
Ranchers in Texas are bracing for an outbreak of screwworms, flesh-eating parasites that could reduce already diminished cattle herds and further drive up the cost of beef.
Rising beef prices typically lead consumers to trade down from steaks and roasts to cheaper cuts. But even that might not bring much relief this time.
Ground beef is a Key Value Item, one among 35 products that consumers look to when deciding if their grocery retailer is giving them a good deal. Beef’s already been on the rise – its price per pound is up more than 10% in the past year – and further increases will make it even tougher for retailers to deliver on shoppers’ perception of value for their weekly staples.
Aldi managed to finish July with its 80/20 ground beef under $5 a pound. That puts July’s KVI leader in a special position among retailers – it’s a price even second-place Amazon couldn’t beat in what has become a monthly horse race for the top spot. And Walmart, for its size and scale, finished July with its per-pound price for ground beef approaching $9.
The outlook for beef prices suggests they’re not done climbing, which makes the drop in egg prices a small consolation. The average price of Grade A dozens, another KVI basket staple, has dropped more than 40% since March after soaring to record highs over the months prior.
To be sure, the cost of protein will be putting added pressure on consumers’ grocery spending as well as retailers’ ability to deliver value and keep shoppers from shopping around.
RDSolutions’ monthly Pricing Insights Report analyzes KVI pricing across nine U.S. geographic regions, helping retailers understand how their price perception stacks up against national, regional, discount and club competitors.
This exclusive monthly report illustrates where retailers lead or lag vs. competitors, how to spot pricing misalignments and margin risks, and how steady food inflation and looming tariffs are impacting KVI strategy.
Access the full July Retail Pricing Insights Report here: https://hubs.ly/Q03CNzsj0
