• The Wall Street Journal, Tuesday, April 1, 2008 11:15 AM

The powerful marketing pitch of buy-one-get-one-free offers for nonessential items is whipsawing consumers at a time when they're paying more for must-haves. The average price of a dozen large eggs in February was $2.17, up 24% from the year before, while a gallon of milk rose 26% to $3.87 compared with February 2007.

In a marketing move two years ago in which it tried to capture more dollars from wealthier shoppers, Wal-Mart stopped stressing its low-price message. But just before the Super Bowl, it announced an "economic-stimulus plan" that included lowering prices between 10% and 30% on thousands of items. But even with the promotions, the price of a basket of goods selected by Credit Suisse researchers at a Chicago Wal-Mart was up 2.5% in February compared with January.

Recent data from traditional grocery stores show that sales growth among large packaged food and beverage manufacturers is starting to slow and volume is starting to decline. Some analysts see that as a sign that high food and beverage prices are starting to turn off consumers who are strapped by high gasoline prices, falling home values and job losses.

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