LINKEDINCOMMENTMORE

The grocery price war — and the tricky situation it’s created for food retailers — is on full display this Thanksgiving season.

The price of a basket of Thanksgiving items, including a 12-pound turkey, is down 6.7 percent at Wal-Mart Stores Inc. this year, according to a report from Bloomberg Intelligence.

The study gives a snapshot of an industry where competition has become increasingly cutthroat. Wal-Mart has succeeded in reinvigorating its crucial grocery business, which generates nearly 60 percent of U.S. revenue, even as German discount chains Lidl and Aldi expand their presence.

Even though grocery prices have risen for three straight months after a record run of deflation, retailers are still reluctant to pass on the increases to customers, according to Jennifer Bartashus, an analyst at Bloomberg Intelligence.

“Nobody wants to be the first one to raise prices,” she said. “It’s remarkable, coming out of a sustained period of deflation, that the prices haven’t crept up more.”

The Wal-Mart meal came in at $54.84. Shoppers seeking an even cheaper option, though, should head to Aldi, where a similar group of 20 products can be purchased for $41.19 — down 2.6 percent from last year.

While Whole Foods remains a high-end Thanksgiving destination, the cost of turkey dinner is lower there, as well, following its acquisition by Amazon.com Inc. A basket of primarily organic items was priced at $113.71, down about 16 percent from 2016. Amazon hasn’t said much publicly about its strategy for the chain, but it’s managed to boost store traffic with ballyhooed price cuts on a handful of popular items since the deal closed in August.

Prior to the Whole Foods takeover, the biggest story in the industry was Lidl’s expansion to the U.S. The company, which has battled Aldi for decades in Europe, now has 45 locations on the East Coast and is forcing competitors to keep prices down to maintain customer traffic.

The Bloomberg Intelligence study was conducted in New Jersey. Overall, the average price of a Thanksgiving basket of goods was down 0.7 percent. While prices fell at most stores, they rose at Trader Joe’s and Fresh Market, largely on higher produce costs.

After Whole Foods, prices fell the most at Stop & Shop. The basket there came in at $62.93 this year, or 9.4 percent lower than last Thanksgiving.

LINKEDINCOMMENTMORE
Read or Share this story: http://detne.ws/2hR745g