US: Target cheaper than Wal-Mart gap widest in two years
Target this month had lower prices than Wal-Mart for the first time since October, according to research conducted by Bloomberg Industries. The Minneapolis-based chain also led by its widest margin since the monthly study began two years ago. The study examined the gap in average price across a basket of 150 like items at stores within five miles of each other.
The discounters are fighting for U.S. customers who are still dealing with high unemployment and slow wage growth. The chains also are facing more competition from online retailers such as Amazon.com Inc., which offers free shipping and is adding distribution centers to speed up delivery time.
Consumers who shop at discount chains “are trying to stretch their budgetary dollars as much as possible,” Jennifer Bartashus, an analyst for Bloomberg Industries in Skillman, New Jersey, said in an interview. “They will be driven to whatever store offers the better value.”
The second-largest U.S. discounter won this month by cutting into Wal-Mart’s lead in food prices. Bentonville, Arkansas-based Wal-Mart’s advantage in groceries fell to 1.35 percentage points from 4.5 percentage points in July. Target’s improvement in food may have come because of more promotions tied to back-to-school shopping, Bartashus said.
Wal-Mart also lost ground on food prices to Bottom Dollar, a grocery store chain owned by Delhaize Group SA (DELB), according to a separate Bloomberg Industries study released Aug. 20.
‘Some Differences’
Wal-Mart is still the price leader, and if a rival shows lower prices, it is either because of a temporary sale or promotion, Deisha Galberth Barnett, a company spokeswoman, said in a phone interview.
Source: www.bloomberg.com
