Walmart wants you to know it's the cheapest


"We will not be beaten on price," says Eduardo Castro-Wright, vice chairman of Wal-Mart Stores and head of the U.S. division. Castro-Wright was speaking to analysts yesterday, trying to reinforce Walmart's low cost message and describing how it plans to cut prices each week leading up to Christmas.

Does this mean you can expect incredible deals at Walmart this holiday season? Yes, and no.

"You can expect some fantastic bargains at Walmart, but you can expect fantastic bargains at all sorts of other retailers, as well," says one retail insider, who prefers not to be named. "Come on, who in the retail industry didn't expect Walmart to make a lot of noise about their pricing in advance of the holiday season? This is what they do, it's really all they know how to do."

So why did roughly 1,400 news outlets pick this story up? Because the statement was media bait.

Walmart's competitors are getting much better at matching or beating prices, as evidenced by the pricing study done this summer by retail consultants McMillan/Doolittle and reported exclusively by Walletpop. In that study we compared prices on a list of identical items. Target and Walmart were about equal in price, with Target actually $1.35 cheaper than Walmart, but close enough to call it a draw.

Analysts -- the people who issue buy, sell or hold ratings on retail stocks -- know that big retailers are achieving price parity and Walmart executives were speaking to analysts, trying to reinforce their dedication to low prices.

But they were also speaking directly to you, the consumer. Low prices are what distinguishes Walmart, and it doesn't want shoppers to forget it. Strategically cutting prices on gift and seasonal items leading up to the holidays isn't new. In the past, Walmart would talk about rolling back prices as the holiday got nearer. "But now, they want more credit for being the price leader," says our source. "And they're screaming it from the roof tops."