Retail

Dollar General has the lowest prices: Kantar

Many retailers claim they have the lowest prices—so who's telling the truth?

According to a new study by Kantar Retail, which assessed the lowest price available on 21 categories across the edible grocery, non-edible grocery, and health and beauty aids segments, Dollar General took the crown for a third year in a row.

Adam Jeffery | CNBC

The dollar store widened its lead over behemoth Wal-Mart—which ranked second—with an overall basket price that came in 2.5 percent lower. Last year, Dollar General's basket only beat the big-box retailer by 12 cents. Target's prices were the least competitive of the six stores studied, with a basket that was 52 percent more expensive than Dollar General's.

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Although Wal-Mart built its success and scale on its low-price guarantee, it's ceded some market share to smaller, more convenient dollar store retailers over the last several years. The world's largest retailer has once again been investing in price, as it tries to lure cash-strapped consumers back into stores.

It's also ramped up its promise of offering the best price with its Savings Catcher tool. Savings Catcher allows shoppers to scan their receipts with a smartphone, and then compares price tags to other stores. If a lower price is found, shoppers will get the difference on a Wal-Mart gift card.

Price comparisons among six retailers

Retailer Edible Non-edible HBA Total Index to leader
Dollar General $12.25 $9.50 $5.00 $26.75 -
Wal-Mart$11.11 $11.79 $4.51 $27.41 102.5
Family Dollar$13.30 $11.50 $5.00 $29.80 111.4
Stop & Shop$11.50 $11.33 $8.25 $31.08 116.2
Aldi$9.77 $11.44 $14.05 $35.26 131.8
Target$14.30 $16.55 $9.76 $40.61 151.8

Source: Kantar Retail analysis, store visits

Target also offers a price-match guarantee, though it too takes some legwork on the part of the shopper.

Despite Dollar General's overall win, savvy consumers may notice its prices are not lower than its competitors' across the board. When it comes to edible grocery items, Aldi, the German no-frills grocery store chain, has prices that sweep the competition. When it comes to prices for health and beauty aids, Wal-Mart wins.

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All data were collected in southeast Massachusetts in September. Kantar found the lowest-priced item available to shoppers in each category, regardless of brand or pack size (excluding trial sizes), assuming that budget-strapped shoppers could minimally meet their purchase requirements.