Overall, CPG Manufacturers Show Price Declines of -1.6% in 2016
Frozen and Refrigerated Segments Primary Driver

Albany, NY: Consumers are paying less for grocery items in 2016, according to the latest data from Price-Trak, an Albany, N.Y.-based market research company specializing in price and trade promotion reporting of 150 standard categories.

Overall, manufacturers softened their list prices by -1.6% within the total consumer packaged goods (CPG) area as tracked by PRICE-TRAK, a service that has been reporting prices for 40 years. The data was collected from a broad panel of retailers and examined the same UPC’s items between years, totaling over nearly 90,000 unique items examined. List price is the price that manufacturers sell their items to the retail trade and provides the most accurate view of trade pricing vs. retailer shelf pricing which can include various promotional allowances.

The overall decline was primarily driven by much lower trade pricing in the refrigerated and frozen segments, -5.4% and -8.0% respectively. Andy “Dewey” Rumpelt, president of PRICE-TRAK, www.natpromo.com notes: "These are huge price declines being implemented by manufacturers and should help drive sales, especially in the center store frozen foods area which is good news for many supermarkets because it should help with foot traffic." There were several segments where manufacturer pricing increased. In SS beverages for example, the average cost of an item increased by 2.2%, primarily driven by higher coffee costs and wetter than normal weather which impacted fruit production, ingredient in many beverage items.

There is good news for meat lovers. Lower grain cost and fatter, plumper cows led to lower prices in meat, and that translated to manufacturers reducing their prices they charge retailers, who then pass it along to the consumer. Frozen meat was down -18% and refrigerated meat, -8%. Another category with a huge decline was refrigerated eggs, -10%. The egg category has rebounded from the bird flu outbreak in 2015, which decimated egg production. Rumpelt added, "what was interesting is that frozen food prices were down across all 8 of the frozen food categories we track, and suggests that manufacturers are focused on the price to value equation for the shopper."

Other categories where noticeable price declines occurred included canned fish, -8%; and frozen desserts, -8%. Among the categories where price increases were seen included several household categories like laundry treatment, dishwashing and oven cleaners.

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