Walmart's low price promise in focus after Amazon's warning

(Reuters) - Walmart's "Everyday Low Price" promise will be put to the test when it reports quarterly results, after rival Amazon.com's warning that customers had turned bargain hunters, pressuring the online shopping behemoth to forecast a weak current quarter.

Shares of Amazon sank nearly 8% before markets opened on Friday, while Walmart's stock was marginally lower.

Major retailers including Target, bellwether Walmart and Kroger have been pushing to keep prices on essentials low as many Americans shun big ticket spending and turn to discount shopping in the face of sticky inflation.

"Consumers... are not shopping for sport, they're shopping for need. As we go into (retail) results in the next few weeks, we'd probably see similar commentary about consumers responding to prices," John Tomlinson, analyst at research firm M Science said.

"There's weakness in consumer discretionary, and no retail or e-commerce player is immune to that."

Walmart, due to report second quarter results on Aug. 15, is expected to post a 4% rise in quarterly revenue. However, that is set to be its slowest rate of growth in nearly two years, according to LSEG data.

Target and Kroger are set to report their quarterly results after their larger Bentonville, Arkansas-based rival.

Amazon on Thursday reported slowing online sales growth in the second quarter and said consumers were seeking out cheaper options for purchases leading the online giant to forecast current quarter revenue below expectations.

"Consumers are being careful with their spend, trading down, looking for lower average selling price products, looking for deals. That continued into the second quarter, and we expect it to continue into the third quarter," Amazon CFO Brian Olsavsky said on a post-earnings call.

Results from major consumer packaged goods companies including Procter & Gamble and PepsiCo also showed signs of a slowdown.

While P&G reported a surprise drop in quarterly sales, PepsiCo missed analysts' expectations.

The second quarter tends to be leaner for retailers, with sales ramping up in the second half of the year with back-to-school and holiday season demand.

Shares of Walmart and Amazon have outperformed the S&P 500 so far this year, rising 33% and 21% respectively, compared to the 14% gain in the broader index.

(Reporting by Aishwarya Venugopal and Deborah Sophia in Bengaluru; Editing by Nivedita Bhattacharjee)