Dive Brief:

• The price of a holiday meal at Walmart, which includes a 12-pound turkey, is $54.84 — 6.7% less than last year, according to Bloomberg.
• Other retailers are offering low prices on meals, as well, in what analysts are calling a holiday price war. A Thanksgiving meal at Stop & Shop is $62.93 this year, 6.4% cheaper than last year, according to Bloomberg Intelligence, while Aldi’s meal ingredients are $41.19, down 2.6%. Whole Foods, which recently instituted a round of price cuts on holiday staples, carries a price tag of $113.71 on all-organic ingredients, 16% cheaper than last year.
• “Nobody wants to be the first one to raise prices,” one analyst told Bloomberg. “It’s remarkable, coming out of a sustained period of deflation, that the prices haven’t crept up more.”  

Dive Insight:

Thanksgiving has become a proxy for the larger price wars happening throughout the grocery industry. Although inflation has returned, with prices rising three months straight, according to Bloomberg, grocers dare not raise prices or risk losing customers to the competition.

Grocers offer discounts on turkey and trimmings every Thanksgiving, but the cuts this year have gone particularly deep. Whole Foods’ price reductions have undoubtedly been the most well-publicized discounts this holiday season, and stand to boost traffic to stores. But other retailers are offering turkeys for less than fifty cents per pound, and in some cases giving away free birds to customers that meet certain purchase totals.

The Omaha World-Herald recently highlighted local Family Fare and Baker’s stores advertising turkeys at 57 cents per pound, while Fareway stores are giving away turkeys with a $50 purchase. Hy-Vee, meanwhile, is offering its annual “buy a ham, get a free turkey” deal.

According to the Farm Bureau, the average price of a Thanksgiving meal this year is $49.12, down 75 cents from a year ago and the lowest price in five years. Low-price turkeys are to thank: According to the federation’s market intelligence director, wholesale prices for birds have dipped below a dollar for the first time since 2013.

Although grocers will lose money on their turkeys and perhaps their fixings, too, they have an opportunity to draw new customers and build loyalty with existing ones. It’s important, then, that they’re offering good value and a memorable experience. Retailers must also execute the basics really well beyond their holiday selections in order to keep shoppers coming back.

Increasingly, Thanksgiving is also an opportunity for grocers to acquire shoppers online. According to data collected by e-commerce firm Unata, online grocery’s sales lift in the two weeks leading up to Thanksgiving was nineteen times higher than in-store last year. Customers, it seems, are all too happy to let someone else bag up and even deliver those holiday feasts at a stressful time of year.

Grocers, many of whom have expanded their online shopping presence this year, are all too happy to help. If they can deliver a good experience here, there’s a good chance they’ll gain new shoppers for online as well as in-store sales.