Grocers caught in turkey war
The cost of turkeys has escalated this year, and some stores are deeply discounting the bird to attract shoppers.
To keep budget-minded customers from getting sticker shock, some grocery chains are deeply discounting the birds. That's created a "turkey war" between stores fighting for every last consumer dollar.
Post continues below.
"There are tremendous turkey wars," one Barclays Capital analyst told The Financial Times. "Most [supermarkets] do not make money on turkeys. They make money on everything else."
It's very common for grocery stores to chop the price of one featured item in hopes of making up the money on ancillary sales. Turkeys are a perfect scenario for this strategy, as Thanksgiving shoppers might also pick up potatoes, pumpkin pie and other items that can be sold for a profit.
The Supervalu (SVU) chain was selling frozen turkeys for between 47 and 49 cents a pound, the FT reports. The company runs the Albertsons, Shaw's and Cub Foods stores.
Safeway (SWY) was selling turkeys for $5 each with an additional $25 purchase in San Jose, Calif. In Arizona, the chain was selling the birds for 59 cents a pound with the additional purchase.
In Louisiana, a 16-pound turkey was running at 87 cents a pound, according to the HoumaToday site.
Other stores are giving free turkeys if you blow out your entire Thanksgiving budget there. Kmart stores, owned by Sears Holdings (SHLD), are offering a free 10-12 pound turkey if you spend $250 on other items, reports the Atlanta Journal-Constitution. What a bargain.
How much will grocers have to give in order to retain market share this holiday? The stores already operate on thin margins, and the budget-conscious shopper isn't going to allow for many gains.
Turkeys are a bargain even if they cost twice what they did last year, period. There is no issue here. It's healthy and it's cheap. People cry about a once or twice-a-year turkey purchase, and they pay $3 for a cup of coffee or $1 for a bottle of water.
Turkey prices are a non-issue.
Turkey prices rose because grain (feed) prices rose. Grain prices rose because feed grain is scarce. Why? Because the idiots in congress mandated that we drive around on ethanol, made from grain. Why? To reduce pollution. Does it? Of course not! It generates substantially more carbon emissions to produce and transport the stuff than is reduced by burning it instead of petroleum. The ethanol mandate increased the cost of all meats, bread, many vegetable dishes, etc., while INCREASING pollution and destroying any neoprene, etc., seals in the fuel system of your vehicle.
So, once again, an act of congress did the exact opposite of what it was supposed to do while having all kinds of 'unforeseen' negative consequences. Oh, and we give subsidies (actual cash) to the oil companies to do this.
Turkey prices DO matter. Because they are just the tip of the ethanol iceberg. REPEAL the ethanol act NOW.
P.S. UNOME344 Grain is what beer is made from........now you know why your beer costs more.
We live in a rural town too, but we have one grocery store. Market Basket and they always run turkeys on sale. I bought two this week for like $4 each. They were 29cents a pound. With a $25 dollar purchase, but who don't spend $25 on other stuff anyway. A couple loaves of bread and a gallon or two of milk almost makes up half that purchase.
Turkey in the White House???, not really.
LFN from Mombasa, Kenya-------------------------Yea, Buddy !!!!
Copyright © 2014 Microsoft. All rights reserved.
The Ukraine crisis festers and other fresh concerns boil to the surface, knocking down markets and giving volatility some life.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.