Posted on 03/19/2010 8:16:19 PM PDT by STARWISE
Wal-Mart Stores Inc will cut food prices and mount a new ad campaign over the next six weeks, a threat to other U.S. grocers that sent an industry shares index down more than 2 percent on Friday.
A Morgan Stanley analyst first reported the world's largest retailer's plan, calling it a major setback for other U.S. grocers, and the company confirmed the promotions in an email.
"While this helps address Walmart's traffic woes, we view this as a major setback for the grocery stocks, which have been rallying on hopes of a return to more rational pricing," Morgan Stanley analyst Mark Wiltamuth wrote in a note on Friday.
The Standard & Poor's Food Retail Sub-Industry Index closed down 2.2 percent.
Walmart has used aggressive pricing in grocery and other units to bring shoppers into its stores. The grocery business is particularly pressured by such pricing, as its profit margins are already low.
Investors in Walmart have been concerned about signs that shoppers who gravitated to its stores during the worst of the recession -- boosting sales and profits -- are returning to rivals. Traffic fell in Walmart's U.S. stores during its fourth quarter, despite the holiday season, when shopping is at its peak.
(Excerpt) Read more at reuters.com ...
You noticed that too, huh?
Wal-Mart one-year net profit margin: 3.7%
Difference from the company’s 5-year average net profit margin: 0.1 pct. pts.
Difference from the average for the Discount, Variety Stores group: 0.2 pct. pts.
Net profit margins (%)
Company 3.7%
Company 5-Yr Avg. 3.6%
Industry 3.5%
http://moneycentral.msn.com/investor/research/wizards/srwfund.asp?symbol=wmt
~~~~~
Looks like they just kill folks with their greedy profit margin ..... /S
BTW, for all those in the upper midwest, there's a few fresh loads of 56ct navel oranges set to be delivered to the Tomah, Wi Wal-mart DC the 1st of next week. Delivered at the same freight rate that we were getting 3 years ago with a pittance of a so-called fuel surcharge added because people think they should get their products delivered for free I guess.
The drivers says they are fresh, juicy & delicious so don't be afraid to fill up with some fresh vitamin C from Wal-mart next week. Mine will be coming directly from the shed. One of the few perks we get is that once in a while we get to buy direct.
Interesting... Aldi just opened something like 10 stores here in the D/FW Metroplex Thursday... I guess Wal-Mart didn’t want to give an inch to this new-to-Dallas low-price competition.
Wow, great list Steve!!! I had no idea. Thank you sooooo much. I just kind of figured they were all within a few bucks of each other. This can save us a small bundle.
More ammo for me. LOL
You must admit, the Wal-Mart management team must be cutting-edge: offer inferior products at higher prices, and succeed in doing so.
I totally agree.
The prices at my local hardware maybe a tad higher, but you can get in and out very fast. And most important...the store staff actually goes out of their way to be helpful.
Besides, I shop there because I want them to stay in business. It may cost me $2 more, but I’m fine with it.
I’ll pay the extra $2 to be pampered with a “How can I help you?).
Just started shopping at Aldi ... LOVE them.
Their variety is skimpy, few name brands/lots
of private label, produce section is very
meager - just the very basics, meat section
decent .. and what’s there is priced right.
I guess saving on bags and bagging staff makes
a big difference on the bottom line.
There was one checkout gal .. and a spare, the
manager, .. that’s it that I saw, though I’m
sure there must’ve been someone in the stockroom
for loading, etc.
What is this .......Aldi you speak of? I haven’t heard of that.
They are call Neighborhood WalMarts here, but even they do have produce. Where do you have to go to get your produce?
No they won’t. Aldi’s is crap. They are a mile and a half closer to me than Wal-Mart and I have not set foot in it for years.
The worst here I ever saw was Albertsons. I never understood how anyone could afford to buy anything from them. They are not longer, lol. Let's put it this way, I could afford it, just wouldn't. I'm not that preppy, high fluting type.
We may be losing our insurance in a few months also but as long as these are the only prescriptions we need...not so bad. Will have to switch to a cheaper statin, though.
“When was the last time you saw a 20 lb sack of cat food?”
When I ate lunch. No, I don’t have a cat.
That being said, I may start getting some of my basics there because they are a lot cheaper than Wal Mart and I don't have to walk 5 miles in the store just to get a few things. I guess with our idiot marxist president I need to start saving every penny, I'm going to need it after that POS gets through taxing me.
Sounds like Save-A-Lot.
ALDI! That brings back memories. Some of the lowest quality food sold. Of course it’s cheap,but gross.
Every Aldi’s I’ve been in were cramped, dirty and had a very poor selection. Much of the produce was over ripe to the point where it was beyond even baking with it. There were only two lanes open and both had lines at least four carts deep. Nothing I experienced would ever convince me to regularly shop there.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.