Price wars: Amazon and Wal-Mart duke it out

Think price competition is bad?

As Wal-Mart takes aim at online behemoth Amazon, a new study by Kantar Retail found that the world's largest retailer is undercutting even its own in-store prices on the web.

The study, which compared prices on 53 branded items across four categories in August, found the items were 5 percent more expensive at the Walmart Supercenter than they were on Wal-Mart.com. It's a complete 180 from last year, when Kantar found that the Supercenter's basket was 7 percent cheaper.

An employee stacks boxes filled with merchandise for shipment at the Amazon.com Inc. distribution center in Phoenix, Ariz.
David Paul Morris | Bloomberg | Getty Images
An employee stacks boxes filled with merchandise for shipment at the Amazon.com Inc. distribution center in Phoenix, Ariz.

Amazon's basket was more expensive than both those from the Supercenter and Walmart.com—by 12 percent and 17 percent, respectively.

"While Walmart looks to offer consistently low prices across channels, it is also contending with the dynamic pricing realities online retail entails," said Kantar Retail Vice President Anne Zybowski.

These include increased price transparency.

Separately on Thursday, the Associated Press reported that Wal-Mart is considering price matching its online competitors. But never one to be left in the dust, Amazon is once again upping the ante this holiday.

Amazon to start Black Friday on Nov. 1

The online retailer on Thursday said it will kick off its Black Friday deals this Saturday, offering two deals of the day through Dec. 22. The retailer will also offer more than 15,000 lightning deals, which are available to customers for a limited time.

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Last year, Amazon also offered holiday deals in early November, though they weren't as broad or as frequent. The online retailer also released promotions every 10 minutes starting the week of Black Friday. But the company, which gave a disappointing sales forecast for the holiday quarter, is looking to capitalize on early bargain hunters.

"Starting in November, millions of holiday shoppers come to Amazon hunting for the best deals and that one perfect gift," said Steve Shure, vice president of Amazon Traffic.

Amazon again plans to offer new deals every 10 minutes as Black Friday draws closer, spokeswoman Julie Law said.

Holiday surveys out
Holiday surveys out   

The holiday season is already shaping up to be highly promotional, with many experts saying the discounts will be even greater than last year. Already, Target has said it will offer free shipping on all purchases made through its website until Dec. 20. Office Depot and OfficeMax entered the ring on Wednesday, when the retailers said that they, too, will kick off Black Friday deals early, beginning Nov. 2.

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The stores are also launching an "Every Monday is Cyber Monday" initiative, offering online deals every Monday from Nov. 3 through Nov. 24.

Additionally, retailers from Kohl's to Macy's are opening their doors at 6 p.m. Thanksgiving Day—two hours earlier than last year.

Retail Metrics President Ken Perkins said that slow foot traffic and unseasonably warm weather during October have already caused retailers to start marking down items. He expects the price reductions will continue into November and December.

"This has in turn forced many mall-based and big box retailers to ratchet up their discounting into the 40-60 percent off range already as we turn the corner and head into what is widely expected to be a very promotional holiday shopping season," he said.