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The Idaho Statesman reports that in Boise, Albertsons’ home market, the grocery chain is feeling the pressure from Wal-Mart and other competitors that has reduced its market share from 65 percent to about 37 percent.

So far, Albertsons has not faced off with Wal-Mart in as many markets as Kroger has. But now that a head-on battle seems to be coming, both in Boise and elsewhere, the retailer is sketching out its strategy for the coming skirmishes.

One thing it won’t do, according to company spokesmen, is get into a price war. Albertsons believes that its shoppers patronize it for the services it offers, not the prices it charges.

Albertsons is looking to improve its bottom line by auctioning off 56 properties in 19 states this month and next.

The company also is introducing a loyalty marketing card that will allow it to track customer behavior, believing that this will give it a leg up on the competition.
KC's View:
It is tough not to get into a price battle with Wal-Mart, but we think that it is the right way to go. Kroger’s declaration some months ago that it would cut costs in order to match Wal-Mart on prices was met with skepticism, even some derision, within the industry. Albertsons seems to be intent on not making the same mistake.

The thing is, to make this approach work you have to have services to offer.