Man Without Qualities

Sunday, May 02, 2004

One Every Minute

Consumers want to save money on groceries and, all things being equal, buy them at the cheapest supplier. Increasingly, that is not a traditional supermarket but a Walmart or other "discounter." The money saved can go somewhere else - into extra gasoline, for example. In other words, the headline capturing what's happening in this area of retail is:

Benefits To Consumers Of Discount Grocery Retailers Cushion Effects Of Rising Prices Elsewhere!

But that's not the spin provided by the Food Marketing Institute with the helpful assist of the ever-gullible Associated Press:

For financially pressed consumers, it's coming down to a choice between spending on gasoline or groceries, and gasoline is winning, a food industry analysis finds. "Given the economic environment, it is not surprising that more shoppers are buying food today in discount stores and other low-price venues than ever before," said the report by the Food Marketing Institute, released at the organization's annual trade show in Chicago.

Does anyone think that if gas prices go down again that consumers will return in droves to supermarkets charging more for groceries than the Walmart down the street? Of course not. It's not the rise in gas prices that are attracting consumers to Walmart and "discounters" - it's the low prices. And that's not gong to change with a decline in gas prices.

Could it be that the nasty spin placed on declining grocery prices is attributable to something the AP completely fails to note: The FMI is an organ of what is mostly a trade organization of food retailers and wholesalers, the very companies that are being squeezed as the "discounters" get groceries to consumers more cheaply. As the organization's website explains:

The Food Marketing Institute (FMI) conducts programs in research, education, industry relations and public affairs on behalf of its 2,300 member companies - food retailers and wholesalers - in the United States and around the world. FMI’s U.S. members operate approximately 26,000 retail food stores with a combined annual sales volume of $340 billion — three-quarters of all food retail store sales in the United States. FMI's retail membership is composed of large multi-store chains, regional firms and independent supermarkets. Its international membership includes 200 companies from 60 countries.

If he were alive today, PT Barnum might observe that a sucker seems to join the AP as a reporter every minute.

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