Price-Based Competition In The Grocery Segment Weighs On Kraft

The company's sales in the grocery segment declined by ~3% y-o-y, as it lost market share amid intense price-based competition from the private label brands. We expect similar market conditions to continue to weigh on its results this year as well. However, shrinking price gap between the private labels and Kraft's national brands coupled with growing marketing expenditure by the company is expected to reduce the intensity of price-based competition in the long run.