Will Wal-Mart Spark a Grocery Price War?
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.
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
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
- Wal-Mart cuts prices to boost sales – The Associated Press/MSNBC
- Consumers Win as Wal-Mart, Target and Others Fight Price War – WDAF