Wal-Mart readies next round of grocery price cuts
Source: Marketwatch
SAN FRANCISCO (MarketWatch) – Wal-Mart wants to woo more shoppers to its grocery aisles, according to one industry analyst, who expects the retail giant to get more aggressive on price cuts in order to put the pressure on traditional grocers.
Wal-Mart is “lacing up the gloves as it prepares to step back into the ring and win the modern day price war in food retail,” Citigroup analyst Deborah Weinswig wrote in a research note Monday.
She upgraded Wal-Mart to buy from hold, betting the world’s biggest retailer will increase its share of U.S. supermarket sales to 21.6% this year, up from 20.5%. Weinswig upped her 12-month price target on Wal-Mart shares to $64, from $54.
During the current recession, the nation’s three largest grocery chains — Safeway, Supervalu, and Kroger – have all stepped up price cuts to keep customers from heading to Wal-Mart or other food outlets for groceries. And it appears to have worked, according to Citigroup.
