Market Minute: Bananas geared toward ad promoting
Bananas are one of the top-selling items in the produce department every day of the year. The banana supplies are currently sufficient with good quality, according to shippers.
Why are banana ad promotions infrequently seen these days?
First of all, banana production and shipping costs remain low on a per-pound basis. This allows a lower cost to retailers who then use bananas as a low competing priced item to retain their customers.
According to the U.S. Bureau of Labor Statistics, the average retail price of bananas is 57 cents per pound. Some retailers usually price them at 69 cents. That’s tremendously low as we approach 2024, especially with a much higher inflation rate on all other produce.
So, if most retailers are pricing bananas as low as 59 cents, why not insert them in the produce ad at that low retail? The gross profit is low at that price as it would be on other ad features anyway. So why not place bananas in the ad occasionally and increase the sales volume? It does not necessarily need to be the front-page lead, just in the balance of the ad.
The point is this: if bananas are regularly priced so low and the sales are the same every week, why not incorporate them with other ad items and move three to four more times the sales volume? Of course, the unadvertised items in the rest of the line may need some adjusting on the weekly projection to help support the bananas in the mix.
Check with your banana supplier for a possible cost break, which may be possible. If you have a banana contract, take advantage of any lower ad promotion costs if specified.
Ron Pelger is a produce industry adviser and industry writer. He can be contacted at 775/843-2394 or by e-mail at [email protected].