Prices on Everyday Items Changing Frequently Amid Supply Upheaval
New York, NY, February 4, 2022-Everyday items, from grocery staples to home décor, are being priced more like airline tickets and gasoline, where the sticker prices can move frequently within hours or days, reports the Wall Street Journal.
“Retailers say the price moves are in response to rising production, labor and shipping costs, and continuing product shortages associated with the Covid-19 pandemic. The price changes are happening online as well as offline, especially among smaller retailers that have been wary of spending on pricey technology or frustrating customers, according to executives and analysts.
“‘There have been more times than not where we’re almost just breaking even on products because of failure to be able to update the pricing,’ said Jeff Wachenfeld, who manages two True Value hardware stores on New York’s Long Island.
“Quicklizard Ltd., a company that sells software to help retailers automate their pricing strategies, said 75% of the roughly 100 retailers on its platform have increased how frequently they update prices in the past year, with nearly a third changing prices several times a day, up from 15% a year ago.
“So-called dynamic-pricing strategies aren’t new. Some large retailers, such as Amazon.com Inc. and Walmart Inc., have been using the method for years to remain competitive with peers while protecting their margins. Travelers know that airplane fares can change with each web search. Gasoline-station operators have for years toggled between prices several times a day based on factors including supply and demand.
“For grocery chains and hardware stores, shoppers expect prices to be more stable and are often sensitive to fluctuations. Frequent, or even daily, price changes aren’t typical because they can be labor-intensive or require expensive technology.
“‘As a retailer, what I really care about is loyalty,’ said Brian Elliott, a partner at the management consulting firm McKinsey & Co. ‘If the customer feels ripped off, they’re not going to come back to my store.’”