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The WMT price point gap is the key call-out of our ongoing survey of like-for-like product in the value-zone. PSS seems to be more closely aligning its competitive price positioning with TGT, KSS and JCP.

Interesting change this week in our survey of price points on like-for-like product at a select group of low-price/discount footwear retailers.  We track this specifically as it relates to Payless, as its strategy is to sell at a 20-30% discount to its competition. That’s when it has historically realized optimum traffic and conversion.  The one thing that did not change is something that is really worth calling out, which is the consistency in price movements between Payless, Target and JC Penney. As the chart below suggests, PSS sells consistently at a discount to Kohl’s, but in a more volatile range. The big notable, however, is Wal*Mart is tracking at a 32% discount to PSS. This is starting to turn into a head-scratcher for me. Over time, I want to see PSS’ price gap with WMT widen and move closer to the TGTs, KSSs, and JCPs of the world, but that won’t happen overnight. But such material fluctuations so quickly require that I at least stay on guard to ensure that I’m not missing something. It helps that we’re so early in the season. If it was December and we saw this price gap, or I did not have the confidence that Rubel and team are proactively managing this price strategy, then I’d be raising a yellow flag about now. But I'm not. Numbers still need to come up.

And yes, I completely realize that our survey can’t adequately forecast the comp in such a complex business with thousands of stores and hundreds of thousands of SKUs. But not only has this been a directionally accurate tool for us, but most importantly it helps us make sure we’re asking the right questions.

Darius Dale and Brian McGough

PSS: WMT Price Gap Widening - 10 25 2009 8 50 30 PM