BENTONVILLE, Ark. — Wal-Mart Stores saw its stock rise about 3% in Monday’s trading after Citgroup analyst Deborah Weinswig upgraded the stock and said the company was poised to grab more grocery market share from traditional supermarkets.
“Over the past two years, price investments by the supermarkets, especially Kroger Co., narrowed the price gap and drew traffic away from Wal-Mart, especially as the economy stabilized,” she wrote, noting that Kroger has narrowed the price gap with Wal-Mart by about 5%.
Following Wal-Mart’s soft fourth quarter in terms of comparable-store sales, she said, “the company is now recommitted to doing rollbacks the right way. With the peak of technology spending behind it and the productivity loop kicked into high gear, Wal-Mart has the ability to step up its price investments without having to sacrifice margins.”
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