Wal-Mart prices climb 5.8% in a month

By Reuters
Posted Aug. 10, 2010 at 6:04 a.m.

Wal-Mart Stores Inc. has raised average prices at its stores by about 6 percent in a month, according to a recent study in Virginia.

A check by J.P. Morgan Securities said average prices at the Wal-Mart Supercenter in Virginia were upped by 5.8 percent, the most significant sequential increase since it started the study in January 2009.

The world’s largest retailer is still the cheapest bet among supermarkets, but traditional rivals like Kroger Co. and Safeway Inc. are gaining ground — in July Wal-Mart had a 10.4 percent lead relative to a 16 percent lead in June, JP Morgan said.

Rising costs of raw materials and oil are pressuring companies across the board. Companies are passing on some of the input costs to consumers by rising prices as they try and guard margins.

Safeway also raised prices by a modest 1.1 percent. Competitor Kroger, on the other hand, has cut prices 1.3 percent from June to July, as it tries to remain competitive.

“All told, it appears that Kroger has been able to successfully overcome Wal-Mart’s heavy price blitz over the past 4 months…particularly as Wal-Mart continues to ‘rollback’ its rollback campaign,” analysts wrote in a note dated Aug. 9.

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