Wal Mart is no longer the cheapest

**The Black Wolf** · 08-24-2012

http://money.msn.com/top-stocks/post...c-322ae9654306

The famous Target (TGT +1.21%) vs. Wal-Mart (WMT +0.85%) battle rages on, and this month, a tally goes to the former.

For the first time since October, Target has reclaimed the title of "cheapest" from its fellow big-box retailer, Bloomberg reported, and the gap was the biggest its been in the two years the difference has been tracked.

That's especially important in today's economy, as cheap is exactly what consumers are looking for. High unemployment, coupled with rising gas and food prices, means customers are as cash-conscious as ever. And while retail sales finally improved in July, that was one of the first good signs for the sector in months.

Both companies have thus been trying to lure in those penny-pinching customers with discounts and slashed prices. The key to Target's success in the pricing department came from the addition of a groceries to many stores, which cut into Wal-Mart's advantage on food prices. The company has also added discount incentives through its REDCard.

Cheap, though, can have its downside. Target's margins have declined for the past eight quarters, thanks in part to such deals.

And generally, Wal-Mart is still the name that tends to be associated with discount retailers like Costco (COST +1.71%), as are dollar stores like Dollar Tree (DLTR +1.81%) and Family Dollar (FDO -0.56%). The larger company claims that its prices remain lower every day and that Target relies more on seasonal sales.

Target will have to prove that isn't the case when next month rolls around and the back-to-school promotion season has come and gone.

Both retailers are also trying to gain an edge in other ways -- by squeezing their large stores into cities, for example -- especially as competition from online giant Amazon (AMZN +1.96%) remains tough.

While Wal-Mart and Target have lower prices than Amazon, one could argue that you can't put a price on the convenience the online retailer provides over a brick-and-mortar model.

For now, though, things seem to be going just fine for both companies. Wal-Mart has seen gains of nearly 37% in the past year, while Target's shares have climbed around 23%. Maybe with a price gap in its back pocket, Target will be able to climb some more and close that gap as well.

Do YOU still shop at wal mart?

**-Kwesnoth-** · 08-24-2012

Yeah, cause a walmart is closer to my house.

And no matter what prices will be, I can drive by walmart, and from 10 AM on, its packed in there. Target gets its service latter on in the day, and still not as much as walmart.

**Silver_Knight** · 08-24-2012

I can't see nothing ever replacing walmart EVER!!!

**Xelios** · 08-24-2012

Fuck yeah Target! Walmart is too far from where I live to go often.

**Kuro** · 08-24-2012

Hell yea I love Wally World. No Sales Tax FTFW!!

**EatSleepAndPlay** · 08-24-2012

Originally Posted by The Black Wolf

http://money.msn.com/top-stocks/post...c-322ae9654306

Do YOU still shop at wal mart?

I have worked for Walmart and Target in the past. Target was a better job. Walmart is full of crazy people. I still hate being in both of them stores.

**Fon** · 08-24-2012

I do go to Wal-Mart for detergent and house cleaning supplies but for food, I go elsewhere. I haven't bought food in Wal-Mart for over 2 years now due to higher prices compared to WincoFoods.