2. Grocers Absorb Rise in Food Prices to Keep Customers From Straying Dec. 17, 2017 7:00 a.m.
ET: Retailers hold line on prices, fearing they will lose business to discounters and new rivals online
Food costs are ticking up after a multiyear glut of many staples. But consumers aren't paying
much more yet because grocers, discounters and online retailers are all holding down prices to win
business. Many grocers are investing in e-commerce operations to keep up with Amazon.com Inc., which
has slashed prices on products including avocados, organic milk and chicken since it acquired Whole
Foods Market this summer. "Price competition is getting more severe," said Kemper Isely, co-president of
the Colorado-based Natural Grocers by Vitamin Cottage Inc., a health-food chain that competes with
Whole Foods in the West. The chain has cut prices this year in part to try to beat Whole Foods discounts.
Considering grocers, how can you apply price elasticity of demand to this situation?