Maybe; maybe not. I was killing time waiting at the Walmart pharmacy yesterday and wondered through the bakery department. They had a cute little (and I mean little) bundt cake for $9.99. That's a lot of money for a couple of bites of cake when the identical item sells for $2.99 at Smith's (Kroger). The message they might take from this is that if they want to position themselves as the low price leader, they're going to have to have low prices.
Ah, maybe they're right. High gas prices do keep me from driving across town to pay an extra $7.00 for a small cake.