Brief

How retailers can cope as egg prices bounce back

Dive Brief:

  • Major egg suppliers continue to report challenges regarding supply, demand and prices for eggs following the 2015 bird flu outbreak, but those prices may have room to increase this year, Retail Leader reported.
  • Cal-Maine Foods, the nation's largest egg supplier saw its sales fall 54% — to $253.5 million — in its second quarter. The company reported a net loss of $23 million in a time period where it had seen a profit of $109 million the previous year.
  • According to Retail Leader, the company chairman said the industry faced "extremely challenging market fundamentals." However, egg prices are starting to rise again, as is demand for less volatile cage-free eggs.

Dive Insight:

Changing egg prices are significant for manufacturers, but retailers often feel the brunt of these price changes because of grocery stores' direct sales of eggs to consumers. 

Retail egg prices are among the most volatile that grocery retailers have to contend with, according to the U.S. Department of Agriculture's Economic Research Service. That instability exists even without an event like the bird flu outbreak to significantly hamper the egg supply and drive prices to all-time highs.

Eggs have been a staple of the American diet for decades, but after prices skyrocketed, consumers moved on to various alternatives. This has left retailers scrambling to balance profitability concerns with pricing adjustments needed to lure consumers back. As prices continue to fluctuate, retailers may have to develop strategies to encourage egg sales, such as supplying more cage-free varieties to appeal to health-conscious consumers.

Filed Under: Grocery
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