Dodging economic impacts
In times of inflation, every part of your operation is affected from cost of goods sold (COGS) and logistics to labor and fulfillment. Fluctuating gas prices and rising interest rates affect consumer spending and add cost and complexity to your pricing strategies.
To mitigate supply shortages and sticker shock, some suppliers began shrinking package size (shrinkflation), raising prices and adjusting promotion frequency and depth of discounts. In response, you’ve had to adjust your promotional strategy and use inflation to reset prices, offset lost revenues and try to maintain profit margins.
Learn how foodservice suppliers are using shrinkflation to mitigate rising costs
As economic concerns continue to affect when and where your customers shop and how much they spend, consider these strategies to combat price sensitivity and retain customer loyalty:
Be transparent with customers and communicate reasons for price increases.
Add value through customer loyalty programs and personalization.
Plan promotions to capitalize on fewer trips and larger orders.
Compete in other verticals that make sense for your business (ex: grocers can promote prepared meals as an alternative to dining out).