Consumers’ Wallets Get Break With Lower Egg Prices

Eggs have been a major driver of grocery inflation’s persistence, with average prices in recent months rising more than 21% year over year, per the Bureau of Labor Statistics’ Consumer Price Index.

However, these prices are finally plummeting. The drop is due to rebuilt poultry stocks and a reduced threat from bird flu, The Wall Street Journal (WSJ) reported this month. As a result, supply has reached the point that some discount supermarkets can offer eggs on sale.

The news comes at a great time for consumers, who have been looking to stretch their money as far as possible. Continued high prices at the grocery store have already forced 80% of shoppers to reduce the quality or quantity of food items, or some combination of both, as illustrated in PYMNTS’ May “Consumer Inflation Sentiment” report. Dairy — and by association, eggs — is a top-five product category for which consumers have been going to cheaper merchants.

With 29% of consumers who noticed price changes downgrading their related purchases, dairy is the perishable category pushing the most consumers to buy at cheaper merchants, ranking even higher than fresh meat at 27%.

These trade-downs can only happen so many times, however, before landing at the lowest-quality option, and any lifeline in terms of price decreases is especially welcome for the 73% of families who have had to cut the number of their grocery items to counter rising costs. Allocating fewer resources to eggs means that these households may be able to pick up another item or two without going over budget. And for lower-income consumers, the price reductions may be especially timely, as the end of pandemic-era SNAP subsidies has pushed some consumers off a “hunger cliff.”

For non-discount grocers, dropping egg prices may be especially welcome as well. The segment has so far ceded a significant share of food purchases to lower-cost merchants, which are seeing double-digit grocery growth. More traditional grocers are partially responding by absorbing increased supplier costs to control pricing and retain customers.

No hard numbers on eggs’ overall effect on grocery prices may be clear until the next round of inflation numbers is released. However, the expected decrease in costs for many consumers will undoubtedly be welcome, no matter how slight or significant.

The post Consumers’ Wallets Get Break With Lower Egg Prices first appeared on PYMNTS.com.