---
title: Supermarkets Keep Slashing Prices and It’s Not Working
description: Prices at grocery stores decreased on average for the first time in 50 years.
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published: '2017-03-21T16:35:53.000Z'
modified: '2024-04-17T05:29:26.000Z'
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![Shoppers At Ralphs Supermarket in Southern California](https://img.money.com/2017/03/grocerystore.jpg)
*A woman shops at a Ralphs supermarket December 26, 2014 in San Juan Capistrano, California.*

Supermarkets are slashing prices to the point where for the first time in nearly 50 years, prices on items decreased on average.

The price difference is good news for grocery shoppers, but bad news for the industry, [*USA Today* reports](http://www.usatoday.com/story/money/personalfinance/2017/03/20/supermarkets-grocery-store-food-prices/99117710/). In 2016, prices on groceries at stores declined by 1.3%, [according to the Agriculture Department’s Economic Research Service](https://www.ers.usda.gov/amber-waves/2017/march/consumers-paid-less-for-grocery-store-foods-in-2016-than-in-2015/). That’s the first annual decline in prices since 1967.

The price deductions come from growing competition, deflation and other factors, industry leaders and experts told *USA Today*.

“It’s created a price war among everybody,” Phil Lempert, a supermarket analyst, told *USA Today*. “This is great news for consumers, but bad news for businesses who sell food.”

Grocery stores like [Costco](https://money.com/wegmans-trump-wine-boycott/), Wegmans and [Kroger](https://money.com/kroger-coupons-free-food/) cut costs on certain food items last year. Kroger, one of the largest food chains in the country, saw the end of a 13-year-long streak of consistent growth in sales at stores open for at least a year, *USA Today* reported.

Walmart and Target launched cost-cutting initiatives this year to compete with lower priced supermarkets and online sellers, as [Money reported](https://money.com/walmart-target-price-cuts-compete-amazon/).

\[[*USA Today*](http://www.usatoday.com/story/money/personalfinance/2017/03/20/supermarkets-grocery-store-food-prices/99117710/)\]

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