Datasembly, a real-time online and brick-and-mortar product data provider, recently launched its Grocery Price Index tool that allows CPG companies and retailers to stay ahead of grocery pricing, monitor the competition and improve price and promotional strategies. The company provides access to billions of grocery and retail pricing records from every store at hundreds of retailers. More recently, Datasembly worked with WGB to curate a list—a price inflation dashboard—to show how inflation is impacting some of grocery’s top products and product categories. This dashboard provides year-over-year price change data of 273 products at 10,370 unique stores covering four retail chains: Albertsons, Target, Kroger and Walmart. To gain a better understanding of the dashboard and its meaning for grocery retail, WGB recently sat down with Datasembly CEO Ben Reich.
Jennifer Strailey: Which categories on the dashboard are the most sensitive to inflation?
Ben Reich: Based on the dashboard, the top three categories demonstrating dramatic price inflation year over year are produce (12.1%), meat and seafood (9.7%) and condiments, sauces and spices (8.7%) as of Jan. 12, 2022. These three categories have seen notable spikes through Q4 of 2021 and continue to rise in January 2022. Thus far in January 2022, the condiments, sauces and spices category has increased year over year the most at 21.3%, followed by the candy category at 20.3%.
Based on your inflation dashboard (in the categories we have selected for the WGB basket), what trends do you see and where do you think pricing is headed? Are prices fluctuating or is inflation causing high prices that are here to stay for the foreseeable future?
Inflation is at its highest point in almost 40 years, and we expect that this will continue for the near future. Food manufacturers and grocers have faced higher costs for commodities, labor, transportation and other expenses during the pandemic. Those costs have continued to increase, leading manufacturers to pass off some of these costs to their retail customers, who in turn have passed on a portion to consumers—these are not factors that will drastically change in the near future. We expect that this will likely create demand for new private label products, demonstrate new elasticity ranges for key value items, and create a substantial change in long-standing consumer behaviors.
How can grocery retailers benefit from tracking inflation across the store and how can they leverage this data?
The ability to track inflation across the store will present retailers with critical market-wide knowledge they can leverage to set prices on products. These inflation trends can strategically be used to pass pricing increases/decreases on to the customer as a way to manage customer value perception and customer loyalty. A holistic view across categories and key value items (KVIs) can help manage this across the shelves throughout the year ensuring a balanced approach to these changes. We’ve seen that these insights paired with local-level, real-time product pricing, promotion and assortment data are critical assets that help retailers manage through these challenges.
What is the most interesting or surprising data point to emerge from the inflation dashboard?
Inflation for the produce category increased from 1.6% to 19.6% from the beginning of Q4 to the end of Q4 (October through December), demonstrating the continued volatility in the supply chain and labor issues.