Target, which has vowed a comeback following its crisis-ridden launch in Canada, is now beating Walmart at the low price game.
Prices at Target stores in Canada were 3.9 per cent lower than Walmart prices in August, according to a survey from retail consultancy Kantar.
The survey looked at 33 items in the health, beauty and grocery sections, the Globe and Mail reports.
A third of the products surveyed were on sale at Target, while only one was on sale at Walmart, the retail consultancy told Global News.
In a similar survey carried out last year, Target's prices were 0.2 per cent higher than Walmart’s, in Canadian stores. The new numbers suggest Target is moving aggressively to solidify its position in the Canadian market, following an error-prone launch over the past year and a half.
Despite its new-found price advantage, Target “continues to struggle to shift pricing perception amongst Canadians, despite plentiful assurances of its ‘unbeatable prices’,” Kantar retail analyst Robin Sherk said, as quoted at the Financial Post.
Target was the source of disappointment for many Canadian shoppers, who found in-store prices don’t compare to the bargains they’re used to seeing at Target locations in the U.S. The retailer has also developed a reputation for having trouble keeping shelves stocked.
News of target’s more aggressive pricing has prompted speculation of a price war between Target, Walmart and other major retailers like Loblaws.
Retail sales in Canada posted an unexpected decline in August, according to StatsCan data released this week, dropping 0.1 per cent from the previous month.
Many economists note that, with household debt near an all-time high and job creation fizzling over the past year, retailers are bound to come under pressure to maintain market share, which could lead to price wars, particularly in groceries, an area that both Target and Walmart are aggressively expanding into.
But rising food costs are keeping some of those price wars from materializing. Prices, especially for red meat, are rising well above inflation. StatsCan says red meat prices in Canada are up 9.3 per cent over the past year, due to supply problems.
Loblaws said earlier this summer it is absorbing part of the "big shock" of rising meat prices — a sure sign the retailer is feeling the pinch of added competition.
Earlier on HuffPost: