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Walmart has its pricing mojo working

February 25, 2015Written by George Anderson

Walmart is crushing much of the competition when it comes to pricing. That's the conclusion of research conducted by Credit Suisse, which found the difference between Walmart's pricing and that of its mass peers has widened for five straight months. For one competitor in particular, Target, the gap in pricing with Walmart has never been wider.

According to Credit Suisse's Monthly Mass Channel Pricing Survey, the gap between Walmart and its competitors on consumables grew to 17.9 percent in January, up from 17.2 percent in December and the one-year average of 16.2 percent.

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The pricing difference between Walmart and Target grew to 6.9 percent in January, well above the one-year average of 4.2 percent. Credit Suisse's numbers do not account for the five percent discount Target gives to customers who pay with its REDcard. Purchases made with the REDcard represented roughly 21 percent of Target's sales last year.

Credit Suisse has maintained its outperform rating on Walmart, in part, because of the pricing advantage the retailer holds over Target and other peers. Walmart reported total comparable store sales were up 1.5 percent for the quarter ending Jan. 31 while comps for Neighborhood Market were up 7.7 percent. Store traffic was up during the holidays and the company's e-commerce sales, a point of emphasis, were up 22 percent during the period.

Earlier this week, Walmart announced plans to increase wages for roughly 500,000 of its hourly employees along with new training and scheduling programs intended to attract and retain retail talent.

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