Gas prices have been coming down lately and American consumers may be in the position to save even more bucks this summer as a wide variety of retailers react to the latest round of Wal-Mart rollbacks on grocery items.
The world's largest retail chain recently announced it was discounting 22 key grocery items by an average of 30 percent off its previously low everyday prices. The retailer is serious enough about reestablishing its pricing image that it is digging into its own pockets -- not just its suppliers' -- to pay for savings it is passing along to consumers.
Bill Pecoriello, CEO of ConsumerEdge Research, told The Associated Press that a market basket analysis of five food items found Wal-Mart's price to be 24 percent lower than it was a year ago. The items were 14 percent lower than Kroger's price, while beating Safeway by 26 percent.
Executives at two grocery chains, who spoke with requested anonymity, said they have noticed some changes in foot traffic since the rollbacks were announced. They told RetailWire they were reviewing pricing and would likely seek to minimize any damage by running hotter deals on key items. Further, they may more aggressively promote store brands in categories where they felt they couldn't go head-to-head with Wal-Mart.
Target, according to the AP report, has moved to match Wal-Mart's pricing on discounted items.
"It is important to stay competitive, and to make sure that our guests get the best prices we can offer," Vanessa Smith, a spokesperson for Target, told WDAF. "So we are listening to our guests and making sure we have those products available for them."
Discussion Questions: Will Wal-Mart's latest rollbacks lead to a grocery industry price war? What should grocers be doing when price is so front and center in the news?