…Kroger Chief Financial Officer Mike Schlotman recently said pressure from Wal-Mart, which sells more food in the U.S. than any grocer, was mounting...

 

 

Lower Prices at Wal-Mart: Good for Shoppers, Bad for Grocers

 

By Heather Haddon and Sarah Nassauer, Dow Jones Newswires

via Fox Business - April 20, 2017

 

Wal-Mart Stores Inc.'s fight to defend its low-cost reputation is helping to extend the longest food-price decline in decades.

 

The world's biggest retailer is investing heavily to lower prices in its U.S. stores, the company's executives say, as competition heats up against Amazon.com Inc. and European deep discounters Aldi and Lidl. Wal-Mart is spending to beat competitors' prices and test strategic price drops, mostly on food and household goods sold at Wal-Mart stores in the Southeast and the Midwest, say people familiar with the tactics.

 

Wolfe Research recently found prices for a basket of grocery items at Philadelphia area Wal-Mart stores were 5.8% lower than a year ago, while those in the Atlanta and Southern California markets were 4.9% and 2.7% cheaper, respectively.

 

The price war, coupled with Wal-Mart's renewed focus on refurbishing stores, is hurting the nation's biggest grocers. Operating profits for U.S. supermarkets declined about 5% last year, Moody's Investors Service said.

 

Kroger Co., the biggest U.S. supermarket chain, recently reported its first quarterly decrease in same-store sales in 13 years. Cincinnati-based Kroger's shares fell 3% in February after Wolfe Research reported that Wal-Mart was cutting prices in the Midwest. The stock later recovered, but remains down 13% this year.

 

Kroger Chief Financial Officer Mike Schlotman recently said pressure from Wal-Mart, which sells more food in the U.S. than any grocer, was mounting...

 

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