Price war: Cincinnati grocers slash milk prices

Don't Waste Your Money

Northern Kentucky mom Penny Cepaia was stocking up on milk at the Aldi store in Florence, where the price of milk is down to just 97 cents a gallon.

"I have four boys," the thrilled mom said. "They drink a lot of milk, so I buy a lot of milk, and it's definitely a good price."

It sure is.

A milk and eggs price war has broken out among Cincinnati area grocery stores, and the battle is fiercest along Mall and Houston Roads in Florence.

While shoppers on the east and west coasts -- and even in Florida -- are paying close to $4 a gallon for milk this summer, Cincinnati-area consumers are enjoying the lowest milk and egg prices we have seen in years.

Price check

On Thursday, we checked Florence-area supermarkets, and found a price war raging.

  • At Kroger, we found milk for 99 cents a gallon, and a dozen eggs for just 39 cents.
  • At Walmart, milk was a penny less at 98 cents, while eggs were 44 cents a dozen.
  • At Aldi, milk was the cheapest at 97 cents a gallon, with eggs at 43 cents per dozen.

Why such low prices?

Many shoppers are starting to wonder why prices are suddenly so low. How does a store make money selling milk for 97 or 99 cents a gallon?

Simply put: they don't.

This is what is known as a "loss leader" in the retailing world. But right now, it's all about grabbing market share.

Cincinnati retail and securities analyst John Meyer says Kroger is getting hit on all sides right now by new competitors. Therefore, it needs to fight back to keep its loyal shoppers.

"Kroger is fighting a war on many fronts here." Meyer explained. "They are competing against Walmart. Walmart has been cutting prices. Now you have the entry of Lidl (the European discount grocery chains), and the expansion of Aldi."

And with Amazon buying Whole Foods, price wars could soon get even worse for Kroger and other mainstream supermarkets. Of course, this is all great news if you are a shopper.

Prices are a bit higher in Ohio, averaging $1.39 for milk and 89 cents for a dozen eggs at most Kroger stores. But that is still less than the $2 gallon price most shoppers have paid the past year.

Kroger won't say how long it will continue this price war, but told investors in this month's earnings report that these price cuts are worth it to retain a customers loyalty.

So for now, enjoy the price break. We may not have the beach, but those beach-dwellers are paying $4 a gallon for their milk.

As always, don't waste your money.

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