Price parity at TGT and WMT

Less than a dollar is the price differential between Target and Walmart, according to a new semi-annual pricing study by Kantar Retail. Completed in June in Northeastern Massachusetts, the study looked at 40 national brand items in the categories of edible grocery, non-edible grocery and health and beauty care.

“These two mass retailers continue to contend head-to-head on price, despite Walmart’s latest Rollback price positioning efforts,” said Leon Nicholas, director of retail insights for Kantar Retail and contributor to the study.  “Both retailers exhibited their least expensive overall basket ring since Kantar Retail began the study, suggesting the possibility of a deflationary pattern.”

Unlike the three prior iterations of the study, Target nosed out Walmart this time, but the differential of less than one dollar is inconsequential. “Target had a slight edge over Walmart’s basket price indicating that Target has stepped up to compete with Walmart at the basket level, using tactical price reductions to drive its position and more than match Walmart’s basket value, effectively overcoming the Rollbacks.”

Previous Kantar price studies comparing Target and Walmart were conducted in January 2009, June 2009, and January 2010.

Pricing is always a hot topic and lately much of the interest revolves around Walmart’s actions which influence others’ pricing decisions. Last week, a report from JP Morgan analyst Charles Grom noted that Walmart had increased prices at a store in Virginia. Grom regularly surveys 31 identical items at Walmart, Kroger, Safeway, Harris Teeter and Whole Foods and recently determined there was a modest pull back in promotional activity. That observation was picked up by a Reuters report as an indicator of inflation,while Kantar came to a deflationary conclusion in its pricing study.