Walmart's Low Prices on Food Will Continue to Pressure Supermarkets

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Walmart's Low Prices on Food Will Continue to Pressure Supermarkets



NEW YORK, NY – At its annual meeting last week, Walmart said that it will continue to aggressively price its food items in order to continue to drive traffic to its stores, a move that at least one analyst predicted will hurt traditional supermarkets, the Associated Press reports.

Jefferies & Co. analyst Scott Mushkin noted that Walmart has intensified its competitive pricing over the past few months, and its top supermarket industry competitor, Kroger, has failed to respond convincingly.

"The company acknowledged that it was serious about making sure that its prices were the lowest in the market," Mushkin said. "We view this as a fairly significant development, and one that if it were to become standard practice, could result in a period of lowered profitability for the entire industry until there is significant rationalization."

Mushkin noted that as long as a “hyper-competitive’ environment exists among food retailers, they are more likely to ask for lower prices from packaged food companies.