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Target vs. Walmart: Who's Really Cheaper?

Posted by Barry Silverstein on April 27, 2011 01:00 PM

Walmart has built its entire retail brand around the proposition that it "always" offers the lowest prices. "Always Low Prices" was the seemingly timeless Walmart mantra, only recently replaced with the tagline, "Save money. Live better."

Well it turns out that Walmart's prices are low — but not necessarily lower than everybody else.

Arch-rival Target, who has continued to make gains at Walmart's expense, may actually beat out Walmart when it comes to lower prices, according to recent studies.

Customer Growth Partners, a retail consulting firm, compared the two retail giants' prices on 35 brand-name items across three categories in stores located in Indiana, New York and North Carolina. Based on consolidated results, Target beat Walmart by about two dollars.

The Consumerist blog, owned by the Consumers Union, quotes the president of Customer Growth Partners as saying, "For the first time in four years, our price comparisons between the two has shown that Target has a slight edge over Walmart. Target stepped up its game during the recession... The company caught up with Walmart on making its supply chain more efficient so it could bring down prices on items people frequently buy."

Another firm, Kantar Retail, conducted a price comparison of Target and Walmart stores in Massachusetts and "found similar results," Consumerist adds.

But why not get the results directly from a "real" consumer? Apparently Rob Cockerham, a self-appointed consumer advocate who publishes a blog called Cockeyed.com, wanted to conduct his own price test. Cockerham, who has done price comparisons before, keeps it simple with his latest investigation: "I pick two stores, make a list and add up the prices at both stores." Sounds pretty objective to us.

He did exactly that and went to a Walmart and a Target on April 19 to compare the items on his list. However, he was a bit more informal than the studies cited above. In addition to analyzing the prices of well-known brands, Cockerham allowed for generics (store brands) to be included so he could compare the prices of "the cheapest available version of that item, often the store's label."

Here is Rob's eclectic "shopping" list: taco shells, walnuts, eggs, cake mix, frosting in a tub, ice cream bars, chocolate syrup, hot dogs, hot dog buns, round corn chips, salted butter, 10-pound bag of flour, 12 ounces of premium coffee, Lucky Charms cereal, frozen buffalo chicken strips, Kraft macaroni and cheese, Progresso soup, fresh spinach, baking powder, and half a pound of cheddar cheese. 

After all was said and done, Rob reports that the total price difference was 59 cents — in favor of Target. He says "It's not an absolute win for Target, because the package sizes varied a bit."

Nonetheless, comparing apples to apples, as it were, this informal test and the more official studies above suggest that Walmart may offer low prices — but not always the lowest, which may explain its new price-matching campaign:

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