Walmart to cut grocery prices by $1 billion

BENTONVILLE, Ark. — Walmart said Thursday it will reduce prices on groceries by $1 billion in 2012, in hopes to draw customers in and encourage them to cross-shop in other areas of the store.

Walmart had $145 billion in grocery sales last year in the United States, making it the largest player in terms of domestic grocery sales. It says the price reductions in food and consumables are an investment and won’t impact margins ,especially if shoppers respond as planned with additional traffic and loyalty.

Chief merchandising officer Duncan Mac Naughton described the program at an industry conference, and said that some key momentum is building inside Walmart U.S., referring to the recent sales turnaround trends.