As stores push thrift, shoppers seek the right price

Everyone knows that cash-strapped consumers are cutting back. In response, stores are inundating shoppers with messages to fit their newfound frugality. Target is pushing the "Pay Less" half of its decade-old "Expect more, pay less" tag line. Subway is touting $5 foot-long sandwiches. Even Wal-Mart, known for low prices, has new TV ads reminding customers of the values it offers.

But for shoppers, the extra marketing may not mean much.

They want stores to show them the discounts.

Shopping at Wal-Mart, Raleigh resident Karin Long said Thursday that she hadn't noticed the flashy new orange "Unbeatable prices" signs on nearly every aisle.

"I don't even look at them," she said, shaking her head.

Pointing to the price tag on a shelf of canned vegetables, she added, "This is the sign I look at."

Retailers have long promoted their low prices (think Food Lion and Kmart's blue light specials).

People have always liked saving money, but it hasn't been as crucial for so many people in a long time.

"It has a lot to do with our need to be in control," said retail industry analyst Candace Corlett of WSL Strategic Retail. "People are saying, 'I can't control the big things, so I'm trying to control the little things.' "

Jennifer Robinson is mother to three boys, ages 3 1/2, 2 and 4 months. She took time off from her job as an assistant preschool teacher to have her youngest, and living on one income has been a challenge for the past few months.

So Robinson began clipping coupons, buying store brands and paying more attention to prices. She said national brand names may be going on sale more, but she is not impressed. "They say it's on special, but it still doesn't seem like a good deal," she said. "If you really stop and think about it, a lot of times, it's not."

For retailers such as Target, Robinson and shoppers like her present a problem, because price is her No. 1 priority in making buying choices.

Long associated with chic fashion, Target is now putting more emphasis on prices.

The chain's weekly sales circular feature bigger pictures of fewer items and bigger, bolder type emphasizing values. Signs in stores have been changed to make deals more visible.

"We are striking a balance," spokesman Joshua Thomas said. "If you walk into your Target store, it's still fun, it's still highly stylized, it's still cool and hip. We're just being more direct with the low price."

There are hints that Target may be focusing more seriously on having the lowest prices. "We remain keenly focused on ensuring our prices are the same as Wal-Mart's on all identical and similar products in local markets," Target officials said during the latest conference call about earnings.

Translation: Target is trying to match Wal-Mart's prices, at least on certain items.

Target has a good reason to take aim at Wal-Mart's low prices.

Target's profit dropped 8 percent, and sales at stores open more than a year fell 0.4 percent in the second quarter compared with a year ago.

Wal-Mart sales rise

Wal-Mart's second-quarter profits for its U.S. stores were 10.8 percent higher than the year before, and same-store sales were up 4.6 percent, excluding fuel sales.

Still, Wal-Mart is taking the offensive against competitors that are touting value. It launched a new batch of 15-second TV ads, featuring shoppers talking about Wal-Mart's prices, $4 prescription drug plan and all-under-one-roof convenience.

"The challenges people are facing are pretty unprecedented," said Wal-Mart spokesman Greg Rossiter.

"We don't doubt there are competitors out there who like to be in that position with consumers, but the reality is that's a natural and well-established position for us to be in."