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An employee returns shopping carts from the parking lot back to the Target store at 45 Overlea Blvd in East York on Aug. 5 2014.

Fred Lum/The Globe and Mail

U.S.-based Target Corp. may finally be making some headway in this country.

After launching here last year with prices that consumers found too high, it is now starting to offer prices that beat those at discount archrival Wal-Mart Canada Corp., a new study finds.

In a comparison of 33 national brands in the grocery, health and beauty aisles, the prices at Target Canada were 3.9 per cent lower than those at Wal-Mart Canada, says the study, which was conducted last month by consultancy Kantar Retail of Boston.

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In the same type of study in the spring of 2013, just after Target began to open its first stores in Canada, Kantar found the pricing at the two chains were similar.

Still, while Target easily led in the latest price comparison "it continues to struggle to shift pricing perception amongst Canadians, despite plentiful assurances of its 'unbeatable prices' in store," said Robin Sherk, director of retail insights at Kantar.

She noted that Target is focusing on sharpening its pricing as one of its key initiatives in its turnaround strategy. Other key efforts include ensuring that shelves are stocked because they are often empty, and expanding its offerings to meet customers' needs.

Even so, only half of Target shoppers feel it delivers "very good" or "excellent value for money, suggest shopper data from researcher TNS Canada. That compares with 64 per cent of Wal-Mart shoppers who say it delivers "very good" or "excellent" value for money.

And the continued weak acceptance of Target's REDcard rewards program among Target shoppers signals consumers' unwillingness to buy into Target's broad promise of good value, Kantar said.

Target, which has reported mounting losses in Canada, last spring named new leaders for both the Canadian division and the overall retailer. The company is racing to turn around the operations here.

Consumers have complained of higher prices at Target in Canada compared with those at its U.S. stores. Many of those goods are fashion and home decor lines that are only carried at Target, and the Kantar study doesn't compare those prices at the retailer's stores here and south of the border.

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Kantar's clients include "leading retailers and their suppliers," spokeswoman Katherine Clarke said, without elaborating.

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