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Wal-Mart Widens Price Gap Over Target, Study Says

BOSTON — Wal-Mart Stores’ “self-funded” price investments are driving increased basket price separation from Target, Kantar Retail here said in a report released Monday.

Kantar’s semi-annual pricing study said a basket of branded goods at Wal-Mart was 4% less expansive than the same basket at Target — the largest gap since the pricing study began in 2009. While strategic price discounts on key items continue to be a cornerstone of Target’s price competitiveness, rather than everyday low prices, Target’s overall basket has not been lower than Wal-Mart’s since the January 2011 iteration of this study, Kantar said.

Kantar said Wal-Mart had a particularly strong edge over Target in the edible grocery category — food at the Bentonville, Ark.-based retailer 14.1% cheaper than the same items at Target, Minneapolis.

Read more: Canadian Retailers Brace for Target, Wal-Mart Supercenters

“While the two retailers’ baskets are still closely priced, Walmart has managed a consistent lead since early 2011,” Leon Nicholas, senior vice president of Kantar Retail, said in a statement. “Its positioning is underpinned by management’s revived focus on EDLP. In contrast, Target offers its best prices for guests willing to commit to value in the longer term by stocking-up, realizing gift card values on a return trip, and signing up for a REDcard.

“This price separation is a key strategic piece of Wal-Mart’s efforts to shore up shopper traffic and drive its ‘save money’ brand proposition,” Nicholas added.

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