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The Street has a story about how Walmart, Kroger, Target, Amazon, Albertsons and all traditional supermarkets have a problem bigger than inflation - the general public thinks that "prices are higher than they actually are and that brands are taking advantage of the situation."

Which is bad for traditional grocers, and good for the likes of dollar stores and limited assortment stores.

An excerpt from the story:

"When people shop, few of them track prices. Some might know the regular prices of a few items, but most people base their perceptions on the final prices at checkout. It's an inexact science, and it's led to large consumer misconceptions.

"'Americans believe that grocery retailers are earning a 35.2% net profit margin, 14 times higher than grocers’ actual net profit margin average of 2.5%, and that food-at-home inflation is 24.3%, double the annual rate reported by the U.S. Bureau of Labor Statistics,' according to February's dunnhumby Consumer Trends Tracker."

What traditional grocers need to do, The Street suggests, is "continue to try to show value to consumers and make bold moves like the one Walmart did over Thanksgiving. The chain publicly declared that the components of the traditional holiday dinner would be held at the previous year's prices.

"It's very hard to change perception, which probably gives Walmart and Costco an edge over Target and Kroger, given that the first two have built their brands around low pricing.

"Still, with more than 17.000 Dollar General outlets nationwide, the four giant retailers as well as the regional grocery chains need to work to change the narrative with consumers or risk losing customers."

KC's View:

This has come up before here, and my argument remains the same - if traditional stores are losing control of the narrative about margins and prices, then they need to reclaim it by telling their own stories more effectively.

In my market, companies like Stew Leonard's and Wegmans do a much better job of it than the average store.  They do it by positioning themselves as advocates for the shopper, not sales agents for the supplier.  They use transparency about pricing - explaining why some prices are going up and highlighting places where they can give shoppers wins - as a differential advantage.

This isn't only about storytelling, but that it is an important component of this debate.  You can't let the other guy define the rules of the game.