New York — What a difference a year makes. In 2006, the Market Basket survey revealed aggressive trade-up strategies by the leading mass merchants and by the highly promotional department store operator Kohl's.

For 2007, Home Textiles Today's sixth annual review indicates that the discounters may have bumped against a price ceiling dictated by consumers' concerns about an uncertain economy, soaring energy costs, and the distinct "pop" of the housing bubble.

The top price point market baskets at Wal-Mart, Target, and Kmart all reversed field in the 2007 survey, with the extreme case being Target's falling from a 2006 upswing of 32.2% over 2005, to this year's plunge of 23.4%. That's a 55-point differential.

The top price point basket at Wal-Mart switched from a 2006 rise of 3.2% to this year's fall-off of 17.7%.

Kmart's top price point basket swung from a 2006 increase of 9.6% to a 2007 drop of 6.8%.

The top price basket at struggling Linens 'n Things fell 13.6% last year, and then dropped another 13.5% in 2007.

Out of the nine retailers surveyed, only Kohl's, Marshalls, and Bed Bath & Beyond raised their top price point baskets in the 2007 survey. Kohl's and Marshalls' top price baskets each rose by nearly 20%. The top price register rang up 12.0% at Bed Bath & Beyond — and that was against last year's deepest cut in top price baskets, down 24.4% at BB&B.

What do these three trade-ups in top price baskets say about these merchandisers?

Overall, Kohl's recent year-end financial report showed a "career year" for the well-disciplined operator, and it is worth noting that the $15.5 billion mid-tier retailer is accelerating its shift toward exclusive brands. Marshalls and BB&B also drive their assortments with popular, mid-range brands — a strategy that is much tougher for the "Big Three" discounters to execute.

The top price point basket at JCPenney was essentially flat for the second year, evidence that the company has identified its sweet spots. The slight change was a rise of 2.6% in 2006, followed by a 2007 drop of 1.1%.

Macy's is the newcomer to the Market Basket survey, as its consolidation has pushed its volume ahead of Sears, which consequently dropped off the survey. As a new subject of research, there is no year-to-year comparison available for Macy's.

The opening price point market baskets in this year's Market Basket were impacted by strong signs of price deflation. Each of the four opening price baskets that fell in 2007 did so more steeply than any of the opening basket decreases in 2006.

Indeed, there was no opening price basket that lost value by double-digits last year.

This year, three did: the value of the opening price baskets at Target fell 22.0%, the mirror of its top price point fall of 23.4%; Kohl's opening price basket dropped 13.1%, and Wal-Mart's slipped 10.1%.

The opening price basket at Bed Bath & Beyond edged down 8.4%. Even that fourth-rate drop was steeper than last year's steepest: the 2006 fall of 7.8% by Sears.

The only "outlier" result was the stunning run-up in the opening price basket at Marshalls. This was the most extreme value in the entire survey, a 48.3% increase. Of course, it is important to note that Marshalls consistently scores at or near the lowest in both opening price and top price baskets. A major trade-up in its opening price basket may have been overdue.

The other risers in opening price baskets in 2007 were Kmart and LNT, each with a bit more than a 4% uptick, and JCPenney, with a healthy 10.8% rise.

Last year, the major gainers in opening price baskets made far larger strides: BB&B up 13.2%, Target up 21.3%, Kohl's up 22.8%, and Wal-Mart up 24.2%.

Nothing like that exists in this year's survey results. The price trend is headed the other way — down.

Pricing depends upon sourcing. "H-hour" has arrived for China. "H" as in "half." The big Chinese exporting engine built up over the past decade has now penetrated the U.S. home textiles market to the point where 49% of all products in the 2007 survey were sourced from suppliers in China.

The amazing thing here is the acceleration. Just four years ago, about half of all products in the survey sported "Made in USA" labels. In 2003, the survey showed China as the originator of less than 30% of all items.

For the annual Market Basket reports, HTT assembles a list of basic bed and bath items, then visits one store from each of nine of the top 10 home textiles retailers to find the lowest priced item and the highest priced item for each product on the shopping list. The No. 10 retailer on HTT's Top 50 Retailers ranking — Pottery Barn — was not included in the survey because its in-store assortment of bedding and bath products is too slight to make valid comparisons.

With the addition this year of Macy's, the highest-priced totals skyrocketed to $1,133.96 in the opening price basket and to $2,401.47 in the top price basket. Now that Federated Department Stores is taking every step to turn Macy's into a truly national retail nameplate with volume among the top 10 merchandisers of home textiles, it will be interesting to see how the Market Basket dynamic is affected year to year.

As in previous years, the Market Basket contains only items marked at everyday prices; sale and clearance goods are not added to the cart, in order to establish a base line for EDLP.

While, as "snapshots" the survey results do not represent each chain's "average market basket," they do represent what a customer who shopped these stores in these markets — during the period between February 24 and March 5 — would have found if she were looking for either the least expensive goods or the presumed top-of-the-line products.