Karns Foods, a family-run Pennsylvania-based grocery chain, is now carrying more lower-cost brands and has resorted to dropping some expensive products, reports The Wall Street Journal. The chain reports comparing its prices against big-name retailers including Walmart and Giant each week and adjusting as needed.
Scott Karns, CEO of Karns, noted profits have been negatively impacted by increased labor and energy costs, as wells as price increases from manufacturers that the grocer has had to absorb, to meet customers’ buying habits.
The stores have been getting rid of higher-priced items, like an expensive pain-relief medicine brand, and it is considering eliminating a few salad dressing items that are at risk of going unsold if prices rise.
The company’s price checking methods have resulted in it meeting competitors’ prices, and pricing too far above or below other retailers. If a retailer is charging more for an item, however, Karns may do so too, particularly in “fringe categories,” which include items that are less desired. “It’s impossible to be the cheapest on everything,” said Andrea Karns, VP of sales and marketing at Karns.
The grocer has also begun researching other areas to cut costs, like cashless self-checkout stations to lower labor costs. It has also taken to stockpiling food at lower price points. Full Story (Subscription Required)
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