Jefferies: Pricing Down About 4% In Philadelphia Market

According to Jefferies, “Our survey of roughly 60 items showed prices down about -4% since March, led by Wal-Mart WMT (down -5.5%) and Ahold's Giant. We would prefer prices to be flat or up, but we think the data (is) relatively encouraging considering the ‘hot’ July 4th holiday, the extremely competitive Philadelphia market and trends we have seen in other markets where prices have been down about the same amount since April.” “We saw commodity prices at Safeway's Genuardi's and Supervalu's Acme drop, however, as it appears these two are still struggling to align their perishable pricing…. While competition cut prices in the City of Brotherly Love, Supervalu actually took prices up +1%. This is especially remarkable considering it is the lead-in to July 4th and suggests the company continues to use the banner to generate EBITDA dollars with limited concern for share losses,” the analysts mention. Jefferies adds, “Our research suggests Supervalu is now making some hard choices, using EBITDA dollars from a market that cannot be saved (Philly) to invest in markets where the prospects are much better (Chicago).” More Analyst Ratings here