NEW YORK — Wal-Mart Stores Inc. is continuing its strategy to offer food items at the low prices which will likely hurt traditional supermarkets, an analyst said Monday.
At its annual meeting on Friday, Wal-Mart Stores Inc. said it needs aggressively low prices on food in order to stay top of mind with consumers.
Jefferies & Co. analyst Scott A. Mushkin, who rates the company "Buy," said Wal-Mart, based in Bentonville, Ark., has intensified competitive pricing over the past few months. It views its top competitor in the supermarket industry as Kroger and said they have been slow to respond to Wal-Mart's latest pricing push.
"The company acknowledged that it was serious about making sure that its prices were the lowest in the market," he 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."
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