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Basket Battles Heat Up

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Who has the advantage in the north-of-the-border battle between Target Canada and Walmart Canada?

It’s way too soon to declare a winner, but based on a market basket pricing study conducted in March, Kantar Retail believes that Target’s “Pay Less” consumables prices will stack up well against its Canadian competition and the retailer will prove to be a formidable challenge to Walmart Canada’s price position in the market.

Kantar Retail assessed a basket of 29 national brand edible grocery, non-edible grocery and health and beauty aid (HBA) items from Walmart and Target locations in the greater Toronto Area. Basket contents were pre-determined to achieve a diverse mix of categories that would represent the range of purchase options available to shoppers, and only identical SKUs from both retailers were included. Robin Sherk, director of retail insights and contributor to the study, reports that the price of Target Canada’s overall basket was within 25 cents of Walmart’s.

Other top-level survey findings:
• Walmart’s edible basket drove its position, whereas Target’s was less expensive in non-edible grocery and HBA.

• On an item level, more than half of the items were priced within 3 percent of each other. However, sizable price differentials existed for select items at both stores. This suggests that certain items are being leveraged to drive each retailer’s pricing image.

• Five of the items in Walmart’s basket were on Rollback; Target had three items on temporary price cut (TPC).

• With 5 percent rewards, Target’s basket would have been 4.8 percent cheaper than Walmart’s.

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