Pricing parity at hand in latest survey
The pricing gap between Target and Walmart narrowed last month to a scant 1.7% as Walmart took prices up slightly during August while Target did the opposite, according to a monthly survey by the retail research team at Credit Suisse.
The survey looks at a basket of comparable items at Target, Walmart and other competitors’ stores in the Dallas and Chicago market. The firm noted that the average basket price across all surveyed retailers was up 1.6% year over year, led by a 5.4% pricing increase at Walmart. However, it was down 1.4% in August versus July, as Walmart was the only retailer to increase prices month-to-month. Meanwhile, Target decreased prices 0.9% month-to-month but increased prices by 2.7% year-to-year. As a result, Target’s price gap versus Walmart stood at 1.7% in August, excluding the REDcard Rewards 5% discount, compared with a 3.4% gap the prior month.
“The lower end consumer continues to be strained, and data suggests that retailers may be beginning to feel some resistance,” according to a research note the firm published. “However, despite Walmart’s publicly stated goal to be ‘relentless in widening the price gap,’ it seems that Walmart’s price gap is contracting. This could provide some near term relief for other retailers, but it could also cause (Walmart) to renew its focus on price leadership.”