Price wars for grocers?

http://www.businessweek.com/ap/financialnews/D9EH79D00.htm
Price wars for grocers?
PORTLAND, Ore.
If Wal-Mart Stores Inc. lowers prices on grocery items in its stores, as anticipated, it could extend the price wars among grocers, analysts said Thursday.
Wal-Mart management recently said that the retailer is prepared to roll out a new round of price reductions, although the details are still unclear.
The cycle of price competition, which grocers became steeped in during the recession, will likely continue and escalate now that Wal-Mart has signaled further price reductions, Hapoalim Securities analyst Ajay Jain said in a research note Thursday. He noted that investors are still too eager to shrug off a growing belief that price wars are a "relic" from last year.
"We still don't see any meaningful signs of recovery taking shape at this time," Jain wrote.
He said there are still significant risks for the full-year estimates for Kroger, Supervalu Inc. and Safeway Inc. as many investors appear to believe the period of price competition is over and grocers' results have been benefiting by comparison to a prior year when they were struggling with record high food deflation issues.
Credit Suisse analyst Michael Exstein, however, said in a note Thursday that results of a survey by his firm show the broader change in pricing by Wal-Mart hasn't materialized. But he does expect the Bentonville, Ark., chain to lower prices on key items to stimulate traffic and sales growth.
The hype surrounding these changes is likely to raise concerns among investors, he noted, and said this could pressure supermarket's stocks in the near term.
Shares of Wal-Mart fell 9 cents to $55.83 in afternoon trading Thursday. Kroger shares dropped 14 cents to $22.30, Supervalu was down by 24 cents to $17.24 and Safeway fell 43 cents to $24.90.