An employee at the new CityTarget store sits in a store window overlooking downtown Chicago, as they prepare for the opening, July 18, 2012.JIM YOUNG/Reuters
Target Corp. said on Tuesday it will match on a year-round basis the prices found on the websites of key rivals Amazon.com Inc., Best Buy Co. Inc., Wal-Mart Stores Inc. and Toys "R" Us Inc., its latest tactic to hold onto shoppers focused on price.
The move extends an online price-matching program that Target introduced over the holiday season and which was supposed to last only from Nov. 1 to Dec. 16. It also comes after Target last week reported flat sales growth in December at stores open at least a year.
"I think this is largely symbolic; it's akin to removing the Kindle from their stores," said Wells Fargo analyst Matt Nemer, referring to Target's decision to stop selling Amazon's tablet devices last year.
In November, chief executive officer Gregg Steinhafel said Target was not seeing a lot of price-match activity in its stores.
"It's not likely to have a huge impact on financials or customer behaviour," said Mr. Nemer, who noted that customers are not likely to go to Target's guest services desk for a refund for just a small difference in price.
Also, much of what Target sells, such as apparel and accessories, is exclusive to the store, so there would be no comparable prices from competitors.
But Target will now also match prices year-round from its own website in its stores.
Mr. Nemer called that "a really important step," saying it removes confusion for customers who sometimes see different prices for products such as televisions in stores and online.
While shopping online has grown rapidly in recent years, it still represents a small fraction of overall shopping in the United States. Target's policy of matching online prices differs from policies at several chains, which match only printed advertised prices for items sold at stores.
Target said that throughout the year it will match the price when a customer buys an eligible item at one of its stores and finds the same item at a lower price in the following week's Target circular or in a local competitor's printed ad. It will also match the price if the customer finds the same item at a lower price within a week on Target's website or the websites of Amazon, Wal-Mart, Best Buy and Toys "R" Us.
Amazon says it offers competitive prices and does not offer price matching when an item's price drops after a customer buys it, with the exception of televisions. Wal-Mart matches the prices of print ads from competitors and said it has no plans to change its policy. Wal-Mart also says it checks the prices of 30,000 items at competing chains each week to make sure it has the lowest prices.
Best Buy matches the price from a local competitor's store, a local Best Buy store or its own website. Toys "R" Us matches in-store prices and certain online prices.
Shares of Target were down 60 cents at $60.70 (U.S.) in afternoon trading on the New York Stock Exchange.