Goldman Discusses Retailers During Christmas Shopping Season (TGT, AMZN, WMT)

Goldman Sachs is out with a research report on Amazon.com AMZN, Target TGT and Wal-Mart WMT. In a note sent to clients, Goldman writes, "Walmart recaptured the Toy Tally lead from Amazon, which took a temporary lead after footballing a few items last week. The aggressive cuts abated this week, and Amazon was also impacted by a higher penetration of third-party selling. Walmart prices were 2.1% below Amazon and 5.6% below Target, nearly a 500 bp improvement vs. both retailers. However, out of stocks are an issue with Walmart, Target and Amazon sold out of over 40% of our items. Sequentially, prices were mixed as Amazon rose 8% in the face of larger third-party penetration and intense price cut expiration, while Walmart lowered prices 2%. Prices rose last year at Amazon as well, but they expanded the pricing gap behind low prices on low ticket items." Goldman goes on to say, "Walmart regained its pricing leads in week 8 of our Toy Tally, as Amazon's aggressive pricing on items reversed and were also hurt by high priced third-party selling. Walmart prices were 2.1% lower than Amazon and 5.6% lower than Target, both improving 500 bp compared to last week. However, out of stocks are becoming a high quality problem as retailers continue to sell out of hot items as Christmas fast approaches. Walmart is out of stock online for 76% of the items in our study, while Amazon and Target are both out of stock on over 40%. Last year, Amazon held a large advantage in the pricing gap aided by more intense prices cuts on low ticket items, with less offset from higher priced third-party items. Target was 2.8% higher than Walmart and Kmart 14.4%."