Amazon Fresh has joined the growing ranks of retailers that are cutting prices. It is discounting thousands of grocery items in a bid to entice price-conscious shoppers to add a little bit more to their shopping carts.
The online grocery delivery service, which also operates a handful of physical stores, said its shoppers in the United States will see discounts every day of up to 30% on 4,000 items in-store and online, and those markdowns will rotate weekly.
A number of big retailers in recent weeks, including Target and Walmart, have lowered their prices as they strive to pull consumers into stores and online to spend more freely on both essential purchases such as food and more discretionary purchases like new clothes, decorative items for the home, arts and crafts or hobby kits.
Retailers are feeling jittery after they jacked up prices as inflation spiked in recent years. But now, households aren’t shopping like they used to, and high prices are forcing Americans to choose between wants and needs. In the game of chicken between stores and shoppers, it’s the stores that finally appear to be yielding.
That’s a problem not just for individual shoppers or even big retail chains but for the whole American economy, of which about two-thirds comes from consumer spending.
Shoppers have pulled back for a year now as costs have risen 20% to 30% higher than they were three years ago and as incomes failed to keep up, said Sarah Wyeth, managing director, retail and consumer with S&P Global Ratings.
This is making consumers across income levels look for deals. “There’s just less dollars for consumers to spend,” Wyeth said. The challenge for retailers now is to shake consumers out of that frugal mindset, she added.
The price cuts include meat, seafood, frozen food, dairy and cheese, beverages, snacks and pastas, the retailer told CNN Friday. The discounted food items will include national brands and Amazon’s (AMZN) private label products.
“Increasing our weekly deals across thousands of items and expanding the reach of Prime Savings at Amazon Fresh is just one way that we’re continuing to invest in competitive pricing and savings for all of our customers – both in-store and online,” Claire Peters, worldwide vice president with Amazon Fresh, said in a statement.
For Prime members, Amazon Fresh is stacking more savings by offering a 10% discount on hundreds of online grocery items.
Target this week slashed prices on more than 1,500 popular items, ranging from butter to laundry detergent, in its attempt to pull in more shoppers.
It said Target (TGT) shoppers can expect “thousands more price cuts” — amounting to 5,000 items — being reduced over the summer and that its lower prices aim “collectively save consumers millions of dollars” on household staples and everyday items such as milk, fresh fruit, diapers and even pet food.
Last week, Walmart (WMT) said it has rolled back prices on nearly 7,000 items in its stores, saying it was seeing deflation on some key grocery items.
Value-priced grocer Aldi and furniture and home furnishings seller Ikea have also chopped priced recently.
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