Consumers Gobble Up Turkeys at Less Than Cost
Posted November 18, 1999 6:00 a.m. EST
RALEIGH — Turkeys normally sell for more than a dollar a pound, but right now shoppers can gobble them up for a fraction of the price.
Buying groceries for Thanksgiving dinner is not just a chore; it is how consumers feed the profits at their favorite grocery stores. Except when it comes to the turkey.
"I don't think they're making money on the turkeys themselves," says agricultural economist Dr. Kelly Zering.
One look at the flyers confirms Zering's suspicion. At prices like 37 to 39 cents a pound, stores are actually losing money.
The average wholesale price of turkeys this year is 77 cents a pound, which is up from 72 cents a pound last year. The price reflects a drop in production.
Stores are willing to sell turkeys at half their cost, because they are banking on making money on stuffing, the cranberry sauce and the rest of the fixins. In marketing, it's called a "loss leader."
"It's important to have customers come into the store and buy all kinds of things, and if you can offer one item that they're particularly interested in at an attractive price, they'll come," Zering explains.
Hurricane Floyd destroyed a half-million turkeys in North Carolina, but that is just a small percentage of all turkeys and is not affecting prices.