Aug 9, 2010
Nothing to see here, except yet another sign of the food inflation that’s the story of the moment.
JPMorgan retail analyst Charles Grom reports:
We recently conducted another round of supermarket pricing in Virginia comparing a 31 item like-kind basket at a Wal-Mart Supercenter, Kroger, Safeway, Harris Teeter, and Whole Foods. Overall, while the traditional grocers continue to be more promotional than others, our study revealed a modest pullback in the level of activity across the board.
To this point, our basket showed a 5.8% increase in average prices at Wal-Mart – which represents the most significant sequential increase since the inception of our study in January 2009. Moreover, we only had one rollback item in our basket vs. four in the June study. Even still, Wal-Mart continues to hold the price leadership position with a 10.4% lead vs. the traditional supermarkets (KR/SWY/HT) relative to 16.0% in June. All told, it appears that Kroger has been able to successfully overcome Wal-Mart’s heavy price blitz over the past 4 months, which is a big positive, in our view, particularly as WMT continues to “rollback” its rollback campaign.
This article was posted: Monday, August 9, 2010 at 9:39 am