Posted on 06/17/2005 9:17:36 AM PDT by Tumbleweed_Connection
Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research), which has gained a reputation for leaving opponents limping into bankruptcy court, is taking on Target Corp. (TGT.N: Quote, Profile, Research) in a fight that it just might lose.
Wal-Mart, the No. 1 retailer, is widening its array of stylish-but-cheap goods in hopes of winning over middle-income customers, putting it head-to-head with a rival that has proved it can compete and thrive against a company six times its size.
"Can Wal-Mart make merchandise improvements that will drive incremental sales? Absolutely," said Darrell Rigby, head of the global retail practice at consultants Bain & Co. "Can Wal-Mart beat Target at Target's game? I doubt it."
Target's secret is to match Wal-Mart's prices on commodity items such as food and cleaning supplies, and then use sales of trendy-but-affordable designer merchandise to boost profits.
The strategy seems to be working. For the first quarter ended on April 30, Target turned in a strong 6.2 percent sales gain at stores open at least a year. That was more than double the same-store sales increase for Wal-Mart in the United States.
Wall Street has noticed the discrepancy, rewarding Target's shares with a higher valuation than Wal-Mart's. Target trades at nearly 21 times earnings forecasts for the next fiscal year, compared with a multiple of about 18 for Wal-Mart, according to Reuters Estimates.
The sales gap isn't lost on Wal-Mart executives. Mike Duke, head of the company's U.S. discount stores, said visits to Target stores are the No. 3 use of his time, behind meeting with Wal-Mart employees and customers.
"I'll be straight up -- they are a great competitor," Duke said in a presentation to analysts this month.
WAL-MART CHEAP CHIC?
Now Wal-Mart wants to bring in its own "cheap chic" goods, using the British design team behind its George apparel line to come up with more fashionable offerings.
A Target spokeswoman said the retailer is confident of its strategy and declined to comment on Wal-Mart's plans...
I'm sayin'
I guess you use a Macintosh, instead of a PC too<(¿)>
Yes.
it would be rather inefficient, would it not?
No.
"Actually Walmart s*cks."
It does not - I like being able to do my grocery shopping and pick up shotgun shells all in the same place. :)
Don't get me going. LOL.
After reading through all the posts, I could not believe I am on FR. All the negative stuff about WMT amazes me. For years I have blasted WMT for the way they do business and the cheap junk they sell, and have been flamed on almost all posts.
Anyone else but me notice a change on attitudes toward WMT, or have I slipped into the Twilight Zone.
Funny the Target I was just in tonight must think it is a Wal-Mart. The odor of popcorn was very strong in the store.
Last year I became one of those people that pop into the store for a banana. Decided to dramatically alter the diet part of which was replacing most of my unhealthy snack like doritos with healthy snacks like fresh fruit, but fresh fruit doesn't last real long so that means hitting the grocery store every three or four days.
Yeah I think now that stores are getting so huge optimizing for a forced lap might be on the way out, some stores are starting to optimize for convenience already sticking those popin items right up front, and they're catching on. New waves are coming.
I got a few laughs reading the remarks of the anti-Wally snobs, but all the eltism gets old after a while.
I wonder if Wal-Mart will have a different store for the higher-end product. Just like when they use Sam's Club to compete with Costco, they may open a new line of chain store...
By the way... WalMart sells some pretty good Tropical loung shirts for $14.99. I have one that's black and covered in a pattern of Birds of Paradise.
If they sell good affordable product I will be there.
Walmart here, between Thursday and Sunday is to be avoided. It's horrible. And even more so at the beginning of the month when the gov't checks are out.
BUT >> Walmart does sell ammo and hunting gear, whereas Target supports anti-2nd Amend. Another down side to walmart is they sell the bottom line in tools, small appliances and linen/bath items, the meat they sell in super-walmart is loaded with "a solution of up to 15%" (caveat emptor) and treated to last 2 weeks in the case, and WILL turn green when it comes in contact with heat.
Target is better lit, cleaner, and has slightly better quality items, but they don't get very much business from us because they are not in our area. We shop online, and buy better quality tools and applainces from local, private businesses. Superwalmart is very inconvenient because it was built on the outskirts of town.....we all now have to drive through the tight, small town congestion to get to the other side of town. We live in one of those "small rural communities" with rapid residential growth/influx and the inability to resolve the road and traffic situation.
Superwalmart went in, K-Mart closed. (no great loss, but just one less option).
LOL...we keep hand sanitizer in the car--I won't touch my steering wheel until my hands are cleaned! (in the winter, my daughter and I are happy to keep our gloves on when shopping.)
Many Walmart stores are dirty and all are crammed with Chinese junk that should be considered disposable because it doesn't last. Target stores are cleaner, well-designed and import better products from Italy and other European countries. I wish I could find USA products at either store.
I'm glad we have Walmart and I wish them well. I won't shop there however as my time is worth more that the savings I might get shopping in a crowded, understaffed store. Target is marginally better but don't even try to find sale items if they are electronic. One cannot get there early enough to get one of the five they might have in inventory. I held a raincheck on a camera I wanted for 6-months and never found one in stock.
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