Grocery Prices, Walmart and Kroger

In an interesting article in Supermarket News, the CEO of Kroger said that he is happy with the way that CPG companies are dealing with their lower cost environment... more promotions, and no list price reductions.

This situation is the path of least resistance for Groceries and CPGs, big promos make for good supermarket ads, driving traffic into their stores. But in reality as consumers squeeze tighter on every dollar they have, they will be less impressed by occasional promotions, and more influenced by Walmart's best price everyday philosophy.

I saw the included ad on USA network this weekend... makes a compelling case that Groceries and CPGs will have to stop playing games and change their approach, or Walmart will be unstoppable.