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BENTONVILLE, Ark. - Wal-Mart Stores Inc. told Reuters news service on Friday that it is well-prepared to battle Kroger Co. and other grocery chains on food prices, but it will pinch profit margins.
"(Lower prices) don't necessarily help margins," Lee Scott, chief executive of Wal-Mart, told Reuters in an interview. "With our cost structure, we think we can be competitive."
The comment came after Kroger said last week it will lower food prices to compete with Wal-Mart, which some analysts said could spark a price war and hurt Wal-Mart's margins.
Wal-Mart has 1,060 supercenters in the United States and plans to add 180 to 185 more in 2002.
When asked about his outlook for next year, Scott told Reuters, "We don't see it getting a lot better or a lot worse." He said in 2002, Wal-Mart expects sales growth of 13 percent to 14 percent.