Broadlines & Hardlines - To Promote Or Not to Promote...

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Broadlines & Hardlines - To Promote Or Not to Promote...

Broadlines & Hardlines

Broadlines & Hardlines - To Promote Or Not to June 9, 2026

Promote...

Investor concerns about promotions are at their highest level since 2022, when

the industry faced an overstock of general merchandise inventory following the

pandemic. Kroger's new CEO is intent on shrinking price gaps and has a playbook

from his time at Walmart (product mix & unionization will be headwinds). This

has caused many investors to take a harder look at promotional intensity to Spencer Hanus

see who blinks next. This is also coming at a time when Tariff Refunds are shanus@wolferesearch.com

(646) 582-9344

being distributed, which could destabilize the industry's competitive dynamics. View Spencer’s Research

As a result, executives' commentary on promotions is being scrutinized more View Comp Table

than normal. Overall, we think the combination of weak industry volumes, Tariff Greg Badishkanian

refunds, and one of the industry's biggest players investing in price is raising the gbadishkanian@wolferesearch.com

risk of a price war in the 2H. (646) 582-9340 View Greg’s Research

(-) Price Wars Rarely End Well; Marlboro Friday & Cola Wars Important Lessons. Catherine Lee

When price wars start, it generally leads to a fight to the bottom with everyone losing. clee@wolferesearch.com

Scale also becomes the most important variable because it signals who can take (646) 582-9341

the most pain (favors WMT/COST/AMZN). This was evident in the case of Marlboro Sebastian Holtmeier

Friday and the Cola Wars, which didn't end well for investors who couldn't identify sholtmeier@wolferesearch.com

the bottom. If prices come down, it also isn't clear whether that causes an inflection Zachary Frederick