Saturday, December 27, 2014

Slow Saturday Special: Market Basket Raises Prices

Related: Market Basket Full of Debt

Think you can fit this in there?

"Market Basket’s four percent discount ends Saturday" by Dan Adams, Globe Correspondent  December 27, 2014

It’s one of the many reasons Market Basket customers were so fiercely loyal to the embattled supermarket chain: the 4 percent discount on just about everything at the (already discounted) chain.

But now the much-touted, year-long markdown will come to an end Saturday.

Market Basket said that was always the plan. The price slashing was introduced in January largely in response to high fuel prices and reduced funding to the federal Supplemental Nutrition Assistance Program.

“We felt it was a promotion that would help all our customers, especially the most needy,” said David McLean, the company’s director of operations. “Some people felt back in August with Arthur T. [Demoulas] coming back that it might have ended then, but we had a commitment to run it through Dec. 27 and we stayed true to it.”

Some Market Basket shoppers have grumbled online that the discount should be extended as a reward for their support of the company. But most disagree, arguing that even without the sale, Market Basket’s prices are lower than most.

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Other customers said they were simply grateful the company is still in business after this summer’s turmoil.

“I’d rather give up the 200 bucks I saved this year and have the store keep running,” said Drew Ardini, 37, of Newton. “These people complaining, they can go shop somewhere else if they want. You’re not going to get better prices.”

Economic conditions have shifted since the discount debuted almost a year ago. Fuel prices have plummeted and, more significantly, the US Department of Agriculture is predicting that the wholesale cost of food will continue to increase in 2015. McLean said Market Basket is hoping to absorb as much of those price jumps as it can — an impossible task if it extends the 4 percent discount.

“We’re asking for people’s understanding. It wouldn’t have been tenable,” McLean said. “But we’re committed to our business model of having the best value.”

The spike in food costs has been particularly pronounced for meat and dairy products. The agriculture department’s research arm tracked a 28.6 percent increase in wholesale beef prices between November 2013 and November 2014. Over the same period, wholesale poultry costs increased 9.3 percent, while dairy went up 8.3 percent.

“We’re looking at how we can we absorb those increases and not pass them on,” McLean said. “Even though they don’t see a discount, we’ll be kind of holding the line for the customer.”

David Livingston, a supermarket industry analyst at DJL Research in Milwaukee, said few supermarkets run similar promotions because customers come to expect the discount.

“It’s the end of a 4 percent discount [at Market Basket], but after that long, it just feels like a price increase,” he said.

Still, Livingston said the promotion’s end was unlikely to cost Market Basket many customers as long as the chain keeps its prices below competitors’. And now that Arthur T. has sole control of the enterprise, more big sales could be in the works.

“Arthur T. was never afraid to take a risk and push the envelope on sales like this, which is part of what started that big family feud,” Livingston said. “Now he’s the one facing these questions alone.”

The good will Market Basket accumulated over the summer might have helped counter complaints.

“What they did with the sale was a great thing, but all good things come to an end,” said Tim Golden of Dover, N.H., a longtime Market Basket shopper who helped organize customer protests earlier this year. “I’ve been a proud supporter all my life, and this doesn’t change that.”

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Almost time for supper.

NEXT DAY UPDATE: 

Think of it as breakfast, if you will:

Market Basket drama dominated the summer