the staff of the Ridgewood blog
Ridgewood NJ, every year as Thanksgiving approaches, something surprising happens at grocery stores: turkey prices drop dramatically, even as demand skyrockets. It might seem counterintuitive—after all, shouldn’t prices rise when everyone wants the same thing? But the economics of Thanksgiving turkey reveal a strategy that retailers use to turn us into loyal customers while keeping us coming back for more.
Gobbling Up the Deals
As early as September, big retailers begin promoting affordable Thanksgiving meals. This year, Walmart offered frozen turkeys for just 88 cents per pound, while Target priced its store-brand birds even lower at 79 cents per pound. Aldi joined the fray with a $47 Thanksgiving dinner for 10.
On the surface, these deals are a blessing for consumers still feeling the pinch of inflation. But why are retailers slashing turkey prices when demand is at its peak?
The Logic of Lower Prices
For most of the year, whole turkeys aren’t exactly flying off the shelves. Americans consume far more chicken and beef, with turkey coming in at just 15 pounds per person annually, according to the USDA. Yet, come November, turkey reigns supreme. This year, an estimated 40-50 million whole turkeys will grace holiday tables, representing about 20-25% of all turkeys raised in 2024.
Despite this surge in demand, the per-pound retail price for a frozen turkey under 16 pounds dropped to $1.19 in early November, down from over $2 in September and October. Economists point to a few reasons for this phenomenon:
Price Sensitivity: Consumers are highly aware of turkey prices around Thanksgiving. Retailers lower prices to attract these budget-conscious shoppers.
Loss Leader Strategy: Stores sell turkeys at or below cost to draw shoppers into their aisles. The USDA estimates wholesale turkey prices this fall at around 96 cents per pound, meaning retailers may take a loss on the bird itself.
Building Loyalty: By offering steep discounts, stores hope to entice new customers and keep regulars loyal during a competitive holiday season.
Do Loss Leaders Work?
The concept of a “loss leader” is common in retail. Grocery staples like milk, eggs, and soda are often priced low to lure shoppers, and most customers don’t stop there. In fact, studies show that only 2% of shoppers buy just the loss leader items—they typically fill their carts with higher-margin goods.
In the case of Thanksgiving turkey, stores rely on the same principle. The discounted bird is a way to increase foot traffic, but it’s also a long-term investment. As Tulane University professor Chris Hydock explains, customers drawn in by turkey deals might purchase other holiday essentials—or even a couch or TV.
Additionally, big brands often subsidize discounts for their products. However, in the case of turkey, many discounts come directly from the retailers themselves. This makes it a riskier, yet potentially more rewarding, strategy.
Loyalty in the Season of Giving
Retailers know that loyalty is fleeting. Most shoppers divide their budgets across multiple stores based on price, quality, and convenience. By offering eye-catching deals on Thanksgiving staples, stores like Aldi, Target, and Walmart aim to build loyalty during the year’s most competitive shopping season.
It’s a temporary loss for a long-term gain: a shopper who loves their Thanksgiving savings might decide to shop there regularly, making up for the initial hit to profits.
Why Not Year-Round Deals?
Of course, not everyone is convinced by the strategy. As one Aldi customer asked on Facebook:
“If you can do this now, why can’t you leave the prices like this after Thanksgiving to help us have a little extra room in our pockets?”
While the sentiment is valid, the economics of Thanksgiving turkey are unique. Retailers know that the holiday season is a make-or-break period for winning and keeping customers. Once the season ends, the incentives to lower prices disappear.
So, as you savor your Thanksgiving feast, remember: that turkey might be cheap, but it’s all part of a carefully calculated plan to keep you coming back for more.
Happy Thanksgiving—and happy shopping!
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