By Jeanine Poggi, TheStreet

Wal-Mart's (WMT) crown as the low-price king has been tarnished.

The discount giant, which prides itself on its motto of "Save Money, Live Better," appears to have lost its price perception among consumers. According to a survey conducted by WSL Strategic Retail, 86% of Wal-Mart shoppers no longer believe the retailer has the lowest prices.

"Every brick-and-mortar retailer lowered prices and shouted sales throughout the recession, while the Internet became the go-to place for shoppers in search of the lowest prices," the report said.

This raises a serious conundrum: If Wal-Mart no longer stands for everyday low prices in the eyes of consumers, what does it stand for?

This is something Wal-Mart needs to figure out quickly, as it is poised to report its ninth consecutive quarterly decline in U.S. same-store sales.

Bloomberg leaked an internal memo earlier in the month, which revealed that Wal-Mart's traffic declined 2.6% at U.S. stores open at least a year from February through June. Those stores had 82.8 million fewer visits during the period than the same time last year, according to the memo.

Wal-Mart's image erosion started earlier in the year when rival Target (TGT) narrowed its pricing gap with the retail behemoth.

Target has reduced its prices on key items shoppers remember most, like milk, cereal and diapers, said Customer Growth Partners president Craig Johnson. The "mom shopper," Johnson said, knows the prices of these products down to a penny and can see they are saving money at Target.

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So while Wal-Mart is struggling to woo shoppers, Target has seen its traffic improve for six consecutive quarters.

Johnson said Wal-Mart has regained its pricing edge, but it is becoming increasingly clear that shoppers haven't noticed.

In another study, conducted by Morgan Stanley in July, 60% of customers said they no longer believe Wal-Mart has the lowest prices.

"Our late July grocery pricing survey shows that Wal-Mart has yet to make any significant moves to widen its price lead. As Wal-Mart's core lower-income customer is struggling in this weak economy, we remain skeptical about prospects for a same-store sales turnaround," Morgan Stanley analyst Mark Wiltamuth wrote.

Morgan Stanley's survey also found that Wal-Mart is still passing through inflation and its relative pricing gaps versus the grocers are largely unchanged.

Wal-Mart is also trying to make up for its failed Project Impact initiative, which removed from shelves thousands of products that management deemed unprofitable. It resulted in an outcry from shoppers who could no longer find some of their favorite products and brands in stores.

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Wal-Mart has been working on restocking about 8,500 of those products, but clearly it has yet to bring shoppers back.

While it appears Wal-Mart's U.S. same-store sales are still on a losing streak, Johnson said he is still optimistic heading into second-quarter results. Johnson predicts Wal-Mart will beat estimates, as it has for the past two quarters, on strength at its Sam's Club division and international segment.

Wal-Mart succeeded amid the crux of the recession, capturing shoppers who were trading down from department stores and specialty retailers. While many of those customers have returned to their favorite stores, they could come back to Wal-Mart if the economy sees another dip.

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