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Food Wholesaling and Retailing

Explore the complex process of pricing in food wholesaling and retailing, and how it impacts farmers, consumers, and product movement. Learn about key strategies like market basket pricing, variable pricing, and everyday low prices that help retailers differentiate and stay competitive.

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Food Wholesaling and Retailing

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  1. Food Wholesaling and Retailing Part E AGEC 364

  2. Pricing • Complex process • multi-product sellers with considerable pricing flexibility • set prices to differentiate their stores from competitors

  3. Importance of Pricing • Food retail pricing impacts farmers and consumers • Through food pricing and promotional policies, food retailers influence consumer demand, farm prices, and the movement of farm products

  4. Pricing Strategies • Market basket pricing • Variable price merchandising • “Every-day low pricing”

  5. Market Basket Pricing • Provides retailer with considerable flexibility in pricing individual food items • Total dollar sales must cover expenses, but they do not have to follow wholesale or farm prices • May have low dairy prices and make up with higher meat prices

  6. Variable Pricing • Use temporary, selective price cuts to differentiate their store from competition and attract customers • Loss leader or weekend sales circular • Example: 20% of all food items are priced at or below cost

  7. Everyday Low Prices • Competitive prices with other retailers. • Do not focus on sales. • Can meet competitors prices. • Walmart is example.

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