Price and service battles are playing out much like trench warfare in markets across the country, according to SN data that stems from a new partnership. The results show not only which retailers are winning, but also why.
For the past three months we’ve showcased this data in print and online, based on a collaboration with Brand View, a company that markets a leading price and promotions intelligence analytics tool. The findings result from mystery shops conducted by RetailData in five markets: Chicago, Los Angeles, Houston, Atlanta and Washington, D.C.
Shoppers collect prices of 20 products in a typical weekly basket, and assess store service levels as well. The results are analyzed by Brand View and reported every two weeks by SN.
The findings illuminate how retailers go to market in these regions, and which strategies are successful. Here are some general conclusions based on the reports to date:
1. Although we’re seeing a wide range of pricing from retailers, in most markets there’s an 18% to 20% difference between the highest and lowest baskets in a market. Moreover, having the lowest basket pricing by no means guarantees an operator will have the largest number of lowest-priced items as well.
2. Winning may be everything, but it often comes down to a squeaker. Take the case of Walmart battling Target. Walmart can often claim the largest number of cheapest items because of its pricing strategy. While Target tends to price items in amounts ending in 49 cents or 99 cents, for example, Walmart often prices at 48 cents or 98 cents, according to Matthew Ferguson, SVP, Client Services, Brand View.
In fact, of the 160 SKU comparisons Brand View provided so far between Target and Walmart, on a third of these Walmart edged out Target by just a cent, Ferguson added.
3. A strong regional operator can score big not only on service, but also price. H-E-B was a standout in our Houston three-week survey against Walmart, winning each week for most lowest-priced items, and two of three weeks for least expensive basket, which is quite a feat against the Bentonville giant. Moreover, H-E-B was a leader in the store appearance and ease of shopping categories as well, showing its strong reputation among Texas shoppers.
4. Sometimes a market can completely split between two operators on price and service. A case in point is Washington, D.C., where Walmart took the top honors in each of three weeks for least expensive basket and most lowest priced items. Meanwhile, Safeway, known for its lifestyle format, scored highest each week for both store appearance and ease of shopping.
5. In some highly competitive markets, like Chicago, retailers appear to be exchanging positions as pricing leaders each week. During three weeks of mystery shopping in the Windy City, Meijer, Target and Walmart rotated on producing the least expensive basket.
Meanwhile, you can see an in-depth feature from Jon Springer starting on SN’s main feature this week, which outlines the latest industry pricing trends. I encourage you to follow our ongoing pricing and service coverage in partnership with Brand View as we revisit these markets on a rotating basis. It will be interesting to see if the trends outlined here hold up through the year and beyond.
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