Dive Brief:
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99 Cents Only Stores in California, Arizona, Texas and Nevada are now selling cage-free eggs, according to a company release.
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The discount retailer hopes to transition to 100% cage-free eggs by 2025, based on adequate supply and pricing, and aims to to bolster animal welfare in the process.
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"Access to affordable eggs is extremely important in every market we operate in," 99 Cents Only Store's Vice President of Fresh Rich Winters said. "Having the ability to sell cage-free eggs at a price that aligns with our extreme value proposition, allows us to uphold our commitment to provide affordable fresh food for our customers."
Dive Insight:
The 99 Cents Only Stores has taken another step to back up its "You don't have to be wealthy, to eat healthy" company motto with the introduction of discounted cage-free eggs.
The company press release did not specify how much cage-free eggs will sell for, but holds to its policy of "extreme value." About 20% of 99 Cents Only Stores' merchandise costs consumers more than 99 cents. Even if the eggs cost more than the retailer's namesake price, they will likely be cheaper than cage-free eggs sold at a major retailer or health market.
Eggs, like milk and a few other necessities, are often sold by retailers at “loss leader” prices – prices that actually cost stores money but draw in customers who will spend on more profitable items.
The 99 Cents Only chain, unlike most dollar stores, has a full produce department — which most retailers in this category avoid because their customer traffic doesn't support it. This could be a via.ble strategy, however, to capture consumer loyalty before Lidl begins to encroach on the U.S. discount grocery space.
It will be interesting to see how much the 99 Cents Only chain is prepared to "eat" for its low, low cage-free egg prices. This particular deep discount could expand the retailer's reach to a new kind of consumer. Health trends and animal welfare concerns are trickling down to mass market consumers. Millennials are already doing much more of their grocery shopping at the discount stores. According to checkout data gathered by NPD Group, 25% of customers at the three biggest dollar chains are millennials from households earning $100,000 or more.