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Jefferies: More Talk Of Price Competition

The August ‘19 Monthly Tune-Up from Jefferies LLC cited “more talk of price competition” in recent channel feedback, noting that tariff inflation creates opportunity for share gain to retailers and distributors willing to sacrifice margin. “Recent channel feedback has consistently noted an increased level of price competition from distributors who appear willing to sacrifice margin for market share versus peers that are attempting to fully offset increased import costs via pricing,” analysts Bret Jordan, Mark Jordan and Ethan Huntley wrote in the Aug. 5 report.

“Commentary noted lower prices seen in the independent distributor channel, as well as an increased focus on volume rebate programs for commercial customers among retailers,” the report states. “Notably, the discounting appears focused on the DIFM channel, as gaining commercial market share becomes increasingly important given slower recent DIY growth.”

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