That was the provocative, if somewhat dated, question Smart Money used as a headline on a story this week based on a consumer survey conducted by Morgan Stanley analyst Mark Wiltamuth. He initiated coverage of Walmart with an ambiguous “equal weight” rating and was quoted as saying, “Many consumers no longer think Walmart has the lowest prices.”
Ironically, pricing studies conducted by Wiltamuth’s peers repeatedly show Walmart’s prices are the lowest in market basket comparisons. Unfortunately, the gap while in double digits with most competitors other than Target, isn’t enough to earn the company clear distinction as the overwhelming low price leader.
Three-fifths of the shoppers surveyed by Wiltamauth think that compared with a couple of years ago, Walmart’s prices, while still better than most stores, are no longer the lowest. The survey consisted of 1,513 consumers, 1,149 of who had shopped at Walmart during the previous three months.
According to the Smart Money article, the survey showed only one-in-four shoppers believed Walmart’s everyday prices are “significantly lower” than grocery stores while another quarter of survey respondents believed the company’s prices were equal with supermarkets.
Having prices that are viewed as slightly lower is not good enough, according to Wiltamuth, who noted that Walmart’s pricing lead over the grocers had narrowed to a range of 15% to 20% compared with 30% when he conducted a similar survey in 2008.