CNN reports that a price war of a sort is taking place among Costco, Target, Walmart and Kroger, as all four chains have said that they’ve lowered prices.
The story says that the four retailers are “coy about what was less expensive — and by how much — but it's clear that the price war in the grocery and retail world is intense.”
Here’s how CNN frames the price war:
“Their moves buck the current pricing trend. Inflation has reached 2% and companies are facing rising costs on everything from oil to pulp.
“But these companies are grappling with several threats: competition from each other, dollar stores and, of course, Amazon.
“Promising low prices and great value is their key message to shoppers. Misjudging the cost of eggs or milk risks losing the purchase to rivals. Walmart and Target, for example, even offer price matching guarantees against other retailers. Costco has its own low-price adjustment policy.
“These companies keep tabs on each other and make changes to prices on store shelves and online to stay ahead, experts say.
“Discounts and promotions have mixed effects. Although markdowns can help them grow market share, boost sales and clear out extra inventory, cutting prices eats into profit margins.”
The story says that the four retailers are “coy about what was less expensive — and by how much — but it's clear that the price war in the grocery and retail world is intense.”
Here’s how CNN frames the price war:
“Their moves buck the current pricing trend. Inflation has reached 2% and companies are facing rising costs on everything from oil to pulp.
“But these companies are grappling with several threats: competition from each other, dollar stores and, of course, Amazon.
“Promising low prices and great value is their key message to shoppers. Misjudging the cost of eggs or milk risks losing the purchase to rivals. Walmart and Target, for example, even offer price matching guarantees against other retailers. Costco has its own low-price adjustment policy.
“These companies keep tabs on each other and make changes to prices on store shelves and online to stay ahead, experts say.
“Discounts and promotions have mixed effects. Although markdowns can help them grow market share, boost sales and clear out extra inventory, cutting prices eats into profit margins.”
- KC's View:
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To me, this is a strong message to almost any company not named Costco, Target, Walmart and Kroger … you simply cannot claim to have lower prices than these folks. (Unless you’re WinCo. Then you can go head-to-head with all of them, and be pretty confident about it.) That means you have to define and promote other products and services that differentiate you from the competition … it cannot just be a price hook.
