Target steals title of 'cheapest' from Wal-Mart
This month, the retailer boasts even lower prices than its bigger rival.
By Alyssa Oursler
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.
Post continues below.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.
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.
More from InvestorPlace
I do not shop at Wal-Mart because they undermine the American labor force and support the Chinese economy. This leads to more American dollars going overseas along with the foreign cars that are sold in America it doesn't matter where they are made, the profits still leave the country).
I do not shop at Target either as I think overall their prices are higher and the quality on most items are the same as Wal-Mart. The profits of Target also leave the country so we are selling out the country every time we shop there. Just to set the record straight, I am not a Democrat and I am not pro-union. I think if the American people would just spend a little more to get American made products, we all could share in the wealth. The mentality of many Americans is earn high wages thru union jobs but pay low prices by buying foreign goods. This doesn't work and the American piggy bank is going dry because of it.
Live in America, Work in America, Buy American. Let the rest of the world fend for themselves. Make this country great again. If we work for it we will again be the greatest country in the world. If we don't change and get back to work, we will be a third world country and China will tell us what to do.
Next time you purchase something foreign, think about which country's government will be in charge of your grandchildren's future, or you so shallow you don't even care about your own family?
I'm sorry but I've been in plenty(5 different at least) of Targets in 3 different states(OH, PA, and NV) and plenty(5 at least) of Wal-marts in the same 3 different states and There's just no way I can see Target as a better low price store then Walmart! Actually its not even close! Everything from q-tips to cd's, and from food to furniture is lower in Wal-Mart then in Target! I swear sometimes I truly think these so called experts wouldn't know their a** from a hole in the ground!!
Although I will say it seems like Wal-mart lately has been raising their prices little by little on a lot of items at a faster rate then most stores! Over the last couple of years actually! They don't have that big of price difference that they used to have that made them the number 1 discount store in the world!
Copyright © 2014 Microsoft. All rights reserved.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.