Walmart wins on pricing, but passing through inflation too
The monthly pricing survey Credit Suisse conducts at Walmart stores and various competitors in Chicago and Dallas market reveals the company continues to offer the lowest prices. That’s the good news for consumers; the bad news is Walmart, like every other company, is passing through increased product costs to shoppers.
“While recent commentary from some companies, notably Dollar General and Walmart, suggest that the lower-end consumers are starting to feel the strain of higher prices, we believe most retailers have been successful in passing through cost inflation and will look to continue to do so,” according to Credit Suisse. “Thus far the pricing environment has remained rational, although the key player to continue watching is Walmart.”
The closest competitor to Walmart was Target, but its prices were 4.7% higher than Walmart’s compared with a 4% gap the prior month. The 4.7% gap with Target is the widest seen since last June, but it does not take into account the Target REDcard Rewards program, which reduces prices by 5% for those who pay with a Target credit or debit card.
Walmart’s average gap relative to other competitors was 17.7% in May, up from 16.5% last month with Walgreens and Albertson’s were at the high end, 28% and 25% higher, respectively.