Prices at Wal-Mart Stores Inc. (WMT:US) are lower on average than Family Dollar Stores Inc. (FDO:US) and Dollar General Corp. (DG:US) as the world’s largest retailer expands its presence in neighborhood markets.
Wal-Mart prices were below Dollar General’s 100 percent of the time in household goods and more than 85 percent of the time in grocery, auto supplies, pharmacy and health and beauty aids, according to a study conducted by Bloomberg Industries during the past 22 months.
Wal-Mart, based in Bentonville, Arkansas, is opening more stores in residential areas, stepping up competition with dollar stores which are more commonly located in neighborhood markets. Grocery prices at Wal-Mart fell in the first quarter as part of the retailer’s plan to spend $6 billion to cut prices in the category.
Dollar stores “have a competitive advantage to Wal-Mart in that their locations are in residential areas,” said Poonam Goyal, a Bloomberg Industries senior analyst based in Skillman, New Jersey. “However, as Wal-Mart ramps up its neighbor market stores, that advantage will no longer hold.”
Prices at Wal-Mart were lower than Matthews, North Carolina-based Family Dollar 100 percent of the time in household goods and 95 percent in health and beauty.
Wal-Mart advanced (WMT:US) 0.4 percent to $78.06 at the close in New York. Dollar General, based in Goodlettsville, Tennessee, was little changed at $52.03. Family Dollar fell 1 percent to $60.78.
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