Tuesday, August 16, 2011

Wal-mart no longer seen as the low-price leader


According to MSN.money, Wal-Mart's crown as the low-price king has been tarnished, and Target is poised to take over the throne.

Wal-mart, which prides itself on its motto of "Save Money, Live Better," appears to have lost its price perception among consumers. According to a survey conducted by WSL Strategic Retail, 86% of Wal-Mart shoppers no longer believe the retailer has the lowest prices.

"Every brick-and-mortar retailer lowered prices and shouted sales throughout the recession, while the Internet became the go-to place for shoppers in search of the lowest prices," the report said.

Wal-Mart's image erosion started earlier in the year when rival Target narrowed its pricing gap with the retail behemoth. Target reduced its prices on key items shoppers remember most, like milk, cereal and diapers - those key items appealing to the "mom shopper" who knows the prices of these products down to a penny and can see they are saving money at Target.

This raises a serious question: If Wal-Mart no longer stands for everyday low prices in the eyes of consumers, what does it stand for? This is something Wal-Mart needs to figure out quickly, as it is poised to report its ninth consecutive quarterly decline in U.S. same-store sales. And while Wal-mart is struggling to woo shoppers, Target has seen its traffic improve for six consecutive quarters.

3 comments:

D M said...

I have noticed this at Target. The prices have been considerably lower than Walmart. Interesting article. Thanks!

demji said...

In conjunction with the pricing competition with Target, Walmart is also suffering from some severe "image tarnishing" due to repeated allegations of unfair employment policies, environmental disinterest, and over-infatuation with Chinese-made goods. While I can't say I've stopped shopping Walmart altogether, I've probably reduced the money I spend at "Wally-World" by roughly 50% over the last year. I aim to increase that reduction far more in the future. Local shops and groceries--and yes, Target too--are the recipients of that newly freed cash.

purplegreenpanda said...

Eep. Expensive and low quality. Good luck with that perception, Walmart.

I've noticed the lower prices at Target in the grocery aisle. Even compared to grocery store sales, the prices are good. Excluding loss leader items, of course.