And the winner is...
And the winner Is…
All right, are you ready for the answers to this edition of Know Your Retailers? Here we go. Among Wal-Mart, Kmart and Target in pre-Father’s Day Sunday FSIs:
The retailer with the lowest average price point (to no one’s surprise, I’m sure) was Kmart, at an average of $46.96 per item. If you got it right give yourself 1 point; if you got it wrong, subtract 20 and consider another line of work. (Well, if you guessed Wal-Mart, only subtract 10 and stick around.)
This is the result of ESL’s — sorry, I meant Kmart’s — continuing and increasingly desperate attempts to drive traffic into its stores with a (fill-in-the-blank yourself) merchandising strategy. Bringing the Sears brands in didn’t work. “Remodeling” the stores to something between Kresge and c1962 Frankie’s Market didn’t work. So someone in corporate made the decision to push Velveeta (p. 31, 2 for $4) and no-name “novelty” candy (10 for $10). “Wow!” to borrow a back-page superlative. I’m not sure, but I don’t think I meant that in a good way.
Next: Which one of this trio had the highest average price point? The temptation here might be to guess Target, but you would be wrong. The highest average price point goes to Wal-Mart and not by pennies. The jolly blue giant’s average SKU in the ad was $119.91, compared to Target’s average $65.08 — 184% more. It’s a 255% difference against Kmart.
Which retailer had the lowest percentage of items with a price point under $25? Wal-Mart again with just 52% of its items under $25, compared to 60% for Target and 61% for Kmart. Wait, Target and Kmart in the same breath for anything?
And, finally, in the lightning round: Which one had the highest percentage of items priced $500 or more?
By now you’re probably noticing a pattern: Wal-Mart, once again, with 5% of its advertised items $500 or more, two-and-a-half times that of Target. Here Kmart was barely a blip on the screen, coming in with just one item, 0.3%.
Of course, these results are not necessarily indicative of what’s going on throughout the stores. But they clearly represent how these retailers are trying to position themselves in the marketplace, how they want to drive their businesses and how they wish to be perceived.
And in two of the three retailers, we appear to be witnessing an odd-couple marriage of EDLP with a fairly substantial redefinition of high-low pricing strategies. It’s apparent that much more than the customer is being segmented.
