A March 2013 study by Kantar Retail indicates that Walmart Canada and Target Canada are very competitively positioned from a basket price perspective.
The firm looked at basket of 29 items at one of Walmart’s Canada stores in Toronto and one of Target’s newly opened locations. Based on results from the comparison, Kantar Retail believes that Target’s "Pay Less" consumables prices will stack up well against its Canadian competition and that the retailer will prove to be a formidable challenge to Walmart Canada’s price position in the market.
"The retailers’ baskets were very competitive," said Robin Sherk, director of retail insights and contributor to the study. "We found that the price of Target Canada’s overall basket was within 25 cents of Walmart’s."
However, with Target’s 5% Rewards program its basket would have been 4.8% less expensive.
Among the other findings, Kantar indicated that Walmart’s edible basket drove its position, whereas Target’s was less expensive in non-edible grocery and health and beauty.
At the item level, more than half of the items were priced within 3% of each other. However, there were sizable price differentials on select items at both stores
"Looking ahead, we expect price competition between these two retailers to sharpen as the two retailers compete head-on for the same shoppers," Sherk said. "As Target expands its presence in the Canadian market, we expect Walmart to hone its focus to respond to Target’s aggressive position on certain items."
This may become particularly heated given that 2012 TNS Canada survey data found that 52% of Walmart Canada shoppers are interested in shopping at Target Canada for groceries and HBA items. We also expect Target to further hone its price positioning as it continues its store rollouts and matures in the Canadian marketplace.