Walmart gets the attention of shoppers with egg-ceptional prices
Source: Facebook/LEX 18 News

Walmart is known for its everyday low prices on products across the store, but a recent offer of a carton of 18 eggs for $2 at a store in Kentucky raises questions about how this particular location was able to offer a price so far below that which chains are paying for a dozen eggs wholesale.

Newsweek reports that a store in Harrodsburg, KY, was selling the eggs (the size was not specified in the reporting) well below the $2.16 to $2.18 wholesale price currently being paid by retailers in the Midwest for a dozen medium-sized eggs delivered to the store, based on data from the U.S. Department of Agriculture. It’s also lower than the $2.11 to $2.14 that most pay when the same size eggs go to a warehouse for distribution to stores.

A search of the local area around Harrodsburg found that Walmart goes up against Aldi, Kroger, C&T Food Market, Save A Lot and La Hacienda.

Reports of the low price had some on social media questioning whether the eggs were near their expiration dates or asking why other retailers were charging so much more, according to Newsweek’s reporting.

A Walmart company spokesperson said that the retailer was able to take advantage of a deal to lower its price and “quickly pass on those savings” to its customers.

A carton of 18 Great Value Large White Eggs this morning was listed at $4.20 on the Walmart site for a local store.

The price of eggs have skyrocketed due to an outbreak of the avian flu that has caused poultry farmers to cull millions of birds from the nation’s flocks. The average price nationally for a dozen grade A eggs was $4.82 in January, up from $1.93 the year before, according to the U.S. Bureau of Labor Statistics. The higher prices paid by consumers in recent months have been met with charges of gouging.

Walmart has gained most of the headline attention when it comes to public commitments made by retailers to push back on price hikes in grocery. Doug McMillon, Walmart CEO, in December told CNBC that center store categories posed the biggest challenge in getting prices under control. The retailer has recently warned major consumer packaged goods companies against further increases, Reuters reports.

BrainTrust

“Brilliant, opportunistic tactic by the Harrodsburg, KY store!”

Susan O’Neal

General Manager, Promo Intel & Insights, Numerator


“Many retailers have ‘loss leaders’ to get customers into their doors.”

Shep Hyken

Chief Amazement Officer, Shepard Presentations, LLC


“This a loss leader for them and if anyone decides to compete with them it will be a race to the bottom and Walmart will win.”

Richard Hernandez

Merchant Director

Discussion Questions

DISCUSSION QUESTIONS: How much are Walmart and other large retailers able to influence pricing on commodities such as eggs? What is the likely story behind Walmart’s 18 eggs for $2 sold at its Harrodsburg, KY store?

Poll

How likely is it that Walmart offered 18 eggs for $2 as a loss leader to deal with local competition?

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10 responses to “Walmart gets the attention of shoppers with egg-ceptional prices”

  1. Mark Ryski Avatar
    Mark Ryski

    This appears to be nothing more than loss-leading pricing by Walmart. Given Walmart’s size, they can influence pricing and lead the market. Selecting a high profile category like eggs gives the loss-leading strategy even more attention. I don’t think there’s anything new here.

  2. David Spear Avatar
    David Spear

    This is a promotional play, a one-and-done to drive sales and showcase Walmart’s influence when it comes to pricing. The normal price for eggs is at least double this price anywhere in the stores I’ve shopped, and in most locations around the country. I do think Walmart can play an instrumental role in pushing back against CPGs’ price hikes, which could help other grocers as well.

  3. Richard Hernandez Avatar
    Richard Hernandez

    This a loss leader for them and if anyone decides to compete with them it will be a race to the bottom and Walmart will win. It drives traffic and hopefully the cost will be made up for in the basket mix.

  4. Susan O'Neal Avatar
    Susan O’Neal

    Maybe Walmart landed a great deal on eggs, maybe they decided to use it as a loss leader to win back shoppers who are trading down or out to dollar stores. Either way, brilliant, opportunistic tactic by the Harrodsburg, KY store!

  5. John Lietsch Avatar
    John Lietsch

    I wouldn’t bet against Mark Ryski on the likely story behind Walmart’s pricing. Our problem is that we don’t know the underlying “true” costs of the supply chain impacts on pricing so if we assume the supply chain impact is real, then someone has to eat the loss to drop pricing and that brings us back to Mark’s observation.

  6. Gene Detroyer Avatar
    Gene Detroyer

    We can all speculate why they priced the eggs at an egg-ceptional price in this one store. Indeed what they got was considerable national media attention with a low-price message.

  7. Patricia Vekich Waldron Avatar
    Patricia Vekich Waldron

    Loss-leaders have long been a competitive tactic in grocery, and Walmart has the power to subsidize these items and to influence suppliers for pricing concessions.

  8. Ken Lonyai Avatar
    Ken Lonyai

    What does a one-off deal mean to shoppers nationwide when only a limited group can take advantage? Essentially nothing.

    What does a one-off deal mean to a retailer nationwide when only a limited group can take advantage? Really valuable press that money can’t buy.

  9. Shep Hyken Avatar
    Shep Hyken

    Walmart can’t control the wholesale price of eggs (or any other product). They can control what they charge. Many retailers have “loss leaders” to get customers into their doors. This may be the story behind Walmart’s lower than wholesale pricing for eggs.

  10. Craig Sundstrom Avatar
    Craig Sundstrom

    So wait: we’re talking about a (potential) loss leader at a single Walmart? Yes it could be a competitive response; or a typo, or an Amazon-like effort to see much publicity they can generate with minimal effort (if the latter, it sounds like it may have had decidedly mixed results) Honestly, I don’t think we’ll ever know. (And if it was a deliberate effort, I think it likely the decision was made at the store level, as I doubt HQ can fixate on individual locations).

    Obviously a mega-retailer like WMT can influence prices, but as the past year has shown, “influence” isn’t the same as “dictate.”

10 Comments
oldest
newest
Mark Ryski
Mark Ryski
5 months ago

This appears to be nothing more than loss-leading pricing by Walmart. Given Walmart’s size, they can influence pricing and lead the market. Selecting a high profile category like eggs gives the loss-leading strategy even more attention. I don’t think there’s anything new here.

David Spear
David Spear
5 months ago

This is a promotional play, a one-and-done to drive sales and showcase Walmart’s influence when it comes to pricing. The normal price for eggs is at least double this price anywhere in the stores I’ve shopped, and in most locations around the country. I do think Walmart can play an instrumental role in pushing back against CPGs’ price hikes, which could help other grocers as well.

Richard Hernandez
Richard Hernandez
5 months ago

This a loss leader for them and if anyone decides to compete with them it will be a race to the bottom and Walmart will win. It drives traffic and hopefully the cost will be made up for in the basket mix.

Susan O'Neal
Susan O’Neal
5 months ago

Maybe Walmart landed a great deal on eggs, maybe they decided to use it as a loss leader to win back shoppers who are trading down or out to dollar stores. Either way, brilliant, opportunistic tactic by the Harrodsburg, KY store!

John Lietsch
John Lietsch
5 months ago

I wouldn’t bet against Mark Ryski on the likely story behind Walmart’s pricing. Our problem is that we don’t know the underlying “true” costs of the supply chain impacts on pricing so if we assume the supply chain impact is real, then someone has to eat the loss to drop pricing and that brings us back to Mark’s observation.

Gene Detroyer
Gene Detroyer
5 months ago

We can all speculate why they priced the eggs at an egg-ceptional price in this one store. Indeed what they got was considerable national media attention with a low-price message.

Patricia Vekich Waldron
Patricia Vekich Waldron
5 months ago

Loss-leaders have long been a competitive tactic in grocery, and Walmart has the power to subsidize these items and to influence suppliers for pricing concessions.

Ken Lonyai
Ken Lonyai
5 months ago

What does a one-off deal mean to shoppers nationwide when only a limited group can take advantage? Essentially nothing.

What does a one-off deal mean to a retailer nationwide when only a limited group can take advantage? Really valuable press that money can’t buy.

Shep Hyken
Shep Hyken
5 months ago

Walmart can’t control the wholesale price of eggs (or any other product). They can control what they charge. Many retailers have “loss leaders” to get customers into their doors. This may be the story behind Walmart’s lower than wholesale pricing for eggs.

Craig Sundstrom
Craig Sundstrom
5 months ago

So wait: we’re talking about a (potential) loss leader at a single Walmart? Yes it could be a competitive response; or a typo, or an Amazon-like effort to see much publicity they can generate with minimal effort (if the latter, it sounds like it may have had decidedly mixed results) Honestly, I don’t think we’ll ever know. (And if it was a deliberate effort, I think it likely the decision was made at the store level, as I doubt HQ can fixate on individual locations).

Obviously a mega-retailer like WMT can influence prices, but as the past year has shown, “influence” isn’t the same as “dictate.”