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...
They must be different in different parts of the country.
I just find it odd and interesting that so many Freepers join eagerly with the labor unions and the elitists and the dems to jump on Wal-Mart.
It's a store. Shop there if it suits you; go somewhere else if it doesn't.
It's not that hard to figure out.
I'm not ideologically opposed to (or in favor of) WalMart - I was just sort of giving a store review. They're good for some stuff, but definitely not for other stuff IMNSHO . . .
I have shopped at two WalMarts locally, one in coastal Georgia, and one in North Carolina. They were all about the same as far as cleanliness or lack thereof.
I just saw the same mistake about 5 times and then replied. I didn't mean to single anyone out, just had to say something. Sorry about that.
No Worries!
hahaahhahahahahaha!!!!
I agree. I can't stand the legions of screaming kids, the girl with the high-pitched voice who screams unintelligibly into the intercom every 15 seconds, and the crowded aisles. Shopping at the local Super Target is a much better experience. It's quieter, people are better behaved, and the sales people have headset communication instead of a girl screaming into an intercom.
Well said. Going to Target is a much better experience for me.
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