Final answer:
Walmart employs an 'everyday low pricing' strategy, meaning it consistently offers low prices instead of running frequent sales. This approach differs from predatory pricing, which is a short-term strategy to eliminate competition by setting prices below average variable costs.
Step-by-step explanation:
The pricing strategy that Walmart is using, where it does not offer many sales but advertises that its average prices will usually be lower than the competition, is known as everyday low pricing (EDLP). This approach emphasizes consistent low prices and avoids the need for frequent sales or discounts. It is a part of Walmart's branding and marketing strategy to attract price-sensitive consumers by reassuring them that they can get low prices without waiting for special sales events.
Predatory pricing is a different concept which occurs when a company sets its prices below its average variable costs with the intent to drive competitors out of the market. This kind of pricing can be hard to prove as it involves discerning the intent behind the price setting and distinguishing it from legitimate competitive pricing.
In the case of Walmart, their low pricing strategy is not necessarily predatory as it is their standard business model rather than a temporary tactic to eliminate competition.