Determining low price leader not so simple

The most recent pricing survey from the equity research team at Credit Suisse shows that Walmart is either 3.1% cheaper than Target or 1.9% more expensive. The firm compared prices at stores in the Dallas and Chicago markets, as it does every month, and during March discovered the gap between the two competitors narrowed considerably.

“Target’s price gap with Walmart tightened from 4.2% in February to 3.1%,” according to the firm. “Target’s basket price decreased sequentially by 0.8% compared with Walmart’s 0.3% increase.”

As for the answer to the lowest price question, it’s one of those “it depends” situations. Target beats Walmart if the shopper pays with the retailer’s credit card and receives the additional 5% price reduction whereas Walmart wins if shoppers pay the shelf edge price. Either way, the difference is almost inconsequential, amounting to mere pennies on many items. Both retailers are winners when their prices are compared with food and drug competitors who were significantly higher in both markets. For example, in Chicago Supervalu’s Jewel stores were 15.7% more expensive than Walmart and Safeway’s Dominick’s stores were 13.5% more expensive. Walgreens and CVS were 28.9% and 24.2% more expensive than Walmart. Similar price gaps were seen in the Dallas market with Kroger 11.1% more expensive than Walmart and Safeway’s Tom Thumb division 16% more expensive. Walgreens and CVS were 25.6% and 26.4% more expensive than Walmart.