Target steals title of 'cheapest' from Wal-Mart
This month, the retailer boasts even lower prices than its bigger rival.
By Alyssa Oursler
The famous Target (TGT) vs. Wal-Mart (WMT) battle rages on, and this month, a tally goes to the former.
For the first time since October, Target has reclaimed the title of "cheapest" from its fellow big-box retailer, Bloomberg reported, and the gap was the biggest its been in the two years the difference has been tracked.
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That's especially important in today's economy, as cheap is exactly what consumers are looking for. High unemployment, coupled with rising gas and food prices, means customers are as cash-conscious as ever. And while retail sales finally improved in July, that was one of the first good signs for the sector in months.Both companies have thus been trying to lure in those penny-pinching customers with discounts and slashed prices. The key to Target's success in the pricing department came from the addition of a groceries to many stores, which cut into Wal-Mart's advantage on food prices. The company has also added discount incentives through its REDCard.
Cheap, though, can have its downside. Target's margins have declined for the past eight quarters, thanks in part to such deals.
And generally, Wal-Mart is still the name that tends to be associated with discount retailers like Costco (COST), as are dollar stores like Dollar Tree (DLTR) and Family Dollar (FDO). The larger company claims that its prices remain lower every day and that Target relies more on seasonal sales.
Target will have to prove that isn't the case when next month rolls around and the back-to-school promotion season has come and gone.
Both retailers are also trying to gain an edge in other ways -- by squeezing their large stores into cities, for example -- especially as competition from online giant Amazon (AMZN) remains tough.
While Wal-Mart and Target have lower prices than Amazon, one could argue that you can't put a price on the convenience the online retailer provides over a brick-and-mortar model.
For now, though, things seem to be going just fine for both companies. Wal-Mart has seen gains of nearly 37% in the past year, while Target's shares have climbed around 23%. Maybe with a price gap in its back pocket, Target will be able to climb some more and close that gap as well.
As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.
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I have always preferred Target over Walmart. Target stores are lighter and brighter, don't have the merchandise crammed together, and doesn't have the "big box" feel of Walmart. I have priced many items between the two stores and have found in most cases, the difference is only a penny or two. Even if prices are slightly higher at Target, I would much prefer to shop there over Walmart.
Here in Southern CA, Wal-Mart may be cheaper than Target but I always choose Target over Wal-Mart because Target stores are cleaner and there are no "Wal-Mart People" at Target. Seriously, The Wal-Marts around here are disgustingly filthy and have REALLY strange people shopping there. I once saw a woman open a foot powder container, squirt some into her shoes and place the container back on the shelf. Seriously?? Ugh!
I also saw a kid in a shopping basket grab an apple, put it into his mouth and momma took the apple from him and placed it back in the produce bin. WTF?!? Gads!
I really dislike Wal-Mart.
I didn't like Wal-Mart before this experience but can't stand it since I saw first hand how their employees were treated. Now I spend much more money at local stores that care for their employees and are not afraid to give good customer service with a real smile.
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