Wal-Mart and Whole Foods — the nation’s lowest- and highest-priced big grocers, respectively — have inched a little closer together.
Wal-Mart, despite launching an aggressive marketing campaign this month touting its price cuts, or “rollbacks,” on supermarket items, has actually raised its prices on food by 2.3 percent since February, according to a new study by JPMorgan Securities.
Meanwhile, Whole Foods has stuck with a price-cutting strategy, lowering its prices by about five percentage points since December vs. mainstream grocers like Kroger and Safeway, the study found.
“Whole Paycheck?” JPMorgan analyst Charles Grom asked in a research note yesterday, referring to the snarky nickname the upscale firm has earned from wallet-conscious shoppers. “Not anymore.”
Wal-Mart spokeswoman Linda Blakley didn’t directly respond to the study’s conclusion that the giant discounter’s food prices have increased lately. This month, Wal-Mart is “adding new rollbacks and deeper price cuts,” she said.
“We’ve stepped it up where our customers need us to — with the basics of consumables and food,” Blakley said.
Nevertheless, Wal-Mart’s discounting thus far has been more hype than reality, according to Grom.
He noted that Wal-Mart stores have been decked out with more signs promising “unbelievable buys” that will allow shoppers to “save more.” Wal-Mart is using more “end-cap” displays on its aisles to tout its price cuts, and has brought back “Action Alley,” a floor area dedicated to deep discounting.
“However, in spite of all the visual signs. . . the average price in our 31-item basket (entirely food/consumables) actually increased,” Grom said.
The recent 2.3-percent increase in Wal-Mart’s prices from February follows a 1.9-percent uptick between January and February, he added.
Despite the recent increase, Wal-Mart’s prices remain 12 percent lower than those of traditional grocers, while Whole Foods’ prices are about 14 percent higher.