Anticipating lower costs, Wegmans announces extensive price cuts

ROCHESTER, N.Y. Wegmans on Thursday announced price cuts on hundreds of products in anticipation of lower costs of goods in the future.

 “We are lowering hundreds of prices in anticipation of our costs dropping in the future, and we intend to bring more prices down as soon as we can,” stated  Danny Wegman, chief executive officer, and Colleen Wegman, president, in a letter to employees. “These are uncertain times. We know our employees and customers are very concerned, and so are we. During difficult times like these, it’s OK with us if we make a little less money. And, as always, we are committed to offering the lowest price in the market on the items most important to families. We hope these savings will help you enjoy your time with family even more this holiday season.”

Wegmans explained that in spite of presently falling gasoline prices and declining wholesale prices for corn, wheat and soybeans, food prices have not come down anywhere because manufacturers and producers, including Wegmans, had locked into contracts when costs were much higher and concerns that costs would rise even higher. “Though the lower costs we expect in 2009 haven’t arrived yet, we think it’s necessary to lower prices now,” stated Jo Natale, director of media relations. “As a family-owned business, we can accept leaner profits in order to put employees’ and customers’ needs first.”

 Natale declined to disclose the impact on Wegmans’ bottom line, but said that based on anticipated sales of these products, the total value of price cuts to consumers would amount to $12 million on an annualized basis.  For an average consumer shopping for a family, the savings could amount to as much as $40 to $60 a month.

Items reduced in price can be found in such departments as bakery, meat, produce, deli and grocery, with many of the items targeted for price cuts being Wegmans private label.  “We can be more aggressive with reductions because we have better access to detailed information on the factors that determine costs for those items,” Natale said.  “These products are already the best value in their respective category, and customers are choosing them more often as a way to save money.”

Over the next week, Wegmans will begin to highlight the price cuts with signage in stores.