Walmart maintains price edge over Target

Walmart (NYSE:WMT) narrowly remained the leader over Target (NYSE:TGT) in lower basket totals by 1 percent. 

In the latest iteration of Kantar Retail's semi-annual pricing study, the two big box retailers have the smallest pricing gap since the study was released in June 2012, reported Progressive Grocer.

"Walmart's slightly weakened stronghold on price leadership shows the difficulty in creating basket separation based on price," said Laura Kennedy, principal analyst and primary contributor for the Kantar study. "These results emphasize the need for both retailers to pursue alternative methods to drive impression and value perception by their shoppers."

In its 12th iteration, the study looks at mass channel pricing and determines which retailer's basket of groceries and consumable items offer the lowest prices. Both nation and private label brands are taken into consideration. The Kantar study specifically examines how Walmart is moving toward a lower-pricing strategy and Target is attempting to reorient its pricing and value promises to shoppers.

Identical SKUs from both retailers were assessed and at the same stores previously visited in the Northeast.

Specifically looking at branded items, Walmart's basket was 1.2 percent less expensive than Target, narrowing the gap from the January 2014 study.

While leading on grocery and non-grocery, Walmart's edible basket was 10.5 percent less expensive than Target's, even with two Temporary Price Cuts at Target and two Rollbacks at Walmart.

"Shoppers will increasingly have more tools at their fingertips to obtain or create personalized value," Kennedy noted. "This means that suppliers will have to work harder to establish the value of their products at whatever price, as well as solidify and justify their place on Walmart's own merchandise ladders."

She also noted that Walmart should prepare for more scrutiny over pricing as the retailer rolls out Savings Catcher, its price-matching tool. Thus far, Savings Catcher has bolstered the retailer's popularity in the world of apps. It recently became the top downloaded lifestyle app in the App Store.

Target is still trying to play catch-up in the world of value promises after last year's data breach. In spring, a Kantar study reported that 33 percent of U.S. households shopped at Target in January, just after the breach, down from 43 percent the year prior.

For more:
-See this Progressive Grocer article

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