The New York Post reported in January that after years of trying to imitate Target's trendy "cheap chic," Walmart is taking a fresh look at its competition. The giant retailer is taking aim at another rival: the rock-bottom prices of dollar stores.

Walmart's vendor partners will be challenged to provide lower prices and smaller, more affordable packages. The news is not surprising to Walmart suppliers.

"Wal-Mart is preaching to the choir, according to Cameron Smith of Cameron Smith & Associates, a dominant executive-search firm for Wal-Mart suppliers. Dollar stores led by Dollar General and Family Dollar pose the greatest threat to Wal-Mart over the next five years, according to a survey of Wal-Mart's vendors released last month.

"'To be honest, I didn't really expect that,' Smith told The Post, noting that most chatter typically surrounds Wal-Mart's rivalry with Target."

To read the New York Post article by James Covert, click here.