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02/27/2018

Walmart online grocery prices edge closer to rival

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Walmart is catching up to Amazon in the online grocery pricing wars.

Only a slim gap separates online prices between the two retailers, according to a new study by global e-commerce analytics firm Profitero. The report analyzed pricing for 21,000 products in grocery, beauty and household supplies, finding only a 1.8% average difference between Walmart’s and Amazon’s prices for grocery. Target and Jet.com were both found to be, on average, about 6% higher in grocery than Amazon.

The study builds upon research Profitero published in October 2017 when the company compared online price differences for 13 key non-CPG categories across Amazon, Walmart, Target, Jet.com and other retailers and found that Walmart prices were among the most competitive to Amazon, with an average price difference of 3%. Furthermore, the tighter gap in CPG prices across retailers suggests that CPG categories overall are more prone to price wars with Amazon than non-CPG categories.

Other key findings from the new Price Wars: Grocery, Household & Beauty report:

• Walmart is getting aggressive with price matching. The retailer matched Amazon prices on 53% of all CPG products studied, and 67% in grocery.

• The Amazon Prime Pantry program is paying off, helping create price separation from the competition. Prices on products listed in the Prime Pantry program average about 11% less than those found at other retailers.

• Amazon regained its price lead over Walmart in beauty compared with Profitero’s October findings. Jet.com is now nipping at Amazon’s heels in the beauty category with a price gap of just 1.4% between the two. Walmart beauty prices averaged about 5% more, while Target was almost 7% higher.

• Specialty retailers continue to lose ground in the battle for price supremacy. Online beauty prices at Walgreens.com and CVS.com averaged about 30% higher than Amazon.

“Amazon still reigns as the low-price leader online, but it’s evident that Walmart is making grocery a key battleground for challenging that leadership,” said Keith Anderson, senior VP of Strategy & Insights at Profitero. “Our latest study confirms that price gaps in online grocery are much narrower than what we found to be the case across other non-grocery categories. Walmart is clearly positioning to win shopper loyalty through aggressive pricing on everyday household essentials.”