Grocery Wars - Walmart Maintains Dominance With Lowest Prices In December, Target Retains #2 Spot: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
Telsey Advisory Group analyst Joseph Feldman forecasts grocery sales to moderate in Q4 and early 2024 due to easing inflation. Walmart Inc. (WMT) maintained its price leadership in December 2023, with Target Corporation (TGT) retaining the #2 spot. Kroger Company (KR) and other grocers are seeing unit growth but at a slower pace than expected. Amazon.Com, Inc.'s (AMZN) Amazon Fresh and Albertsons Companies, Inc. (ACI) saw their price premiums to Walmart's basket grow. Feldman reiterated outperform ratings for WMT, TGT, and KR with price targets of $185, $160, and $55 respectively. WMT shares traded slightly lower, TGT shares slightly higher, and KR shares slightly lower in the last check.
December 28, 2023 | 6:46 pm
News sentiment analysis
Sort by:
Descending
POSITIVE IMPACT
Kroger's basket price declined by 1.7% from September, with its price premium to Walmart unchanged at 10.8%. Feldman reiterated an outperform rating with a price target of $55.
Kroger's slight decline in basket price and the reiteration of an outperform rating with a price target could suggest a modestly positive short-term impact, as the company remains competitive in its pricing strategy.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 70
POSITIVE IMPACT
Target's December 2023 grocery basket price decreased by 1.6% from September, maintaining its position as the second-lowest price provider after Walmart. Feldman reiterated an outperform rating with a price target of $160.
Target's unchanged price premium to Walmart and the maintenance of its #2 spot, along with an outperform rating and solid price target, could positively influence the stock in the short term as it reflects stability and competitiveness in the grocery segment.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Walmart maintained its price leadership in December 2023, with lowered grocery prices leading to an increased price leadership average of 20.6% from 18.5% in September. Feldman reiterated an outperform rating with a price target of $185.
Walmart's continued price leadership and the reiteration of an outperform rating with a strong price target suggest a positive short-term impact on the stock, as investors may view this as a sign of competitive strength and potential market share gains.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEGATIVE IMPACT
Albertsons' price premiums to Walmart's basket grew, now in the high-teens to high-20s range versus the high-teens to low-20s range previously.
The growth in Albertsons' price premiums compared to Walmart could suggest a negative short-term impact on the stock, as it may struggle to compete on price with the market leader.
CONFIDENCE 65
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
Amazon's Amazon Fresh and Whole Foods saw their price premiums to Walmart's basket grow, now in the high-teens to high-20s range.
The increase in price premiums for Amazon Fresh and Whole Foods compared to Walmart's basket could negatively impact Amazon's competitiveness in the grocery market, potentially affecting the stock in the short term.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 60