As rising shipping and commodity costs are eroding profit margins for retailers, some are shying away from stocking snack items that list the manufacturer’s suggested retail price on the package, Brandweek reported.
In kind, manufacturers are dropping the price tags altogether. Kraft removed the $1.99 suggested retail price from 12 Planters SKUs that are hitting stores now, the Web site reported.
"Doing so allows retailers more flexibility and [retailers] like the control they have over pricing," said a Kraft spokesperson.
Retailers don’t have to honor suppliers’ suggested retail prices, according to anti-trust rules. However, not doing so could drop them out of favor on terms for future order fulfillment, depending on the clout of the manufacturer and popularity of the product.
Kellogg salespeople have told convenience store buyers and wholesalers that by year’s end it will phase out pre-priced single-serve packs, at least for Cheese-It snacks and Famous Amos cookies.
The trend applies to other categories outside snacks as well. Higher costs for aluminum and sugar prompted Arizona iced tea’s parent company, Ferolito Vultaggio Sons, to raise the wholesale price on its 23-oz. cans of iced teas by 20 cents a case in December, according to Beverage Business Insights.