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For many investors, putting money in Wal-Mart Stores, Inc. (NYSE:WMT) is like investing in America. Wal-Mart stands for everything that your stereotypical middle American does; sprawling properties, gigantic packages of Suave(TM) and Snickers(TM) and Snoop Dogg (TM, probably). Wal-Mart is to retail what the Hummer is to automobiles. Big, resource-hungry, and not entirely respectful of the little guy. And along with America, Wal-Mart seemed like the never-ending growth story. Sometimes I thought the Waltons' place in the billionaires' top 10 would never be equalled.But some days, like today, the news seems to go a different way. Wal-Mart, emperor of homogenization, king of the price cut, sultan of squashing its competitors, posted a teensy 0.5% same-store sales growth in October. There's talk that the retailer might even (yikes! double yikes!) post so-called "negative growth" a.k.a. shrinking in the months to come.
Where Wall Street comes from, negative growth is a synonym for "run for the hills." From whence cometh our help, Americans?
In my opinion, our help cometh from Target Corp. (NYSE:TGT).
Target wins the battle of the big retailers for a number of reasons. Target's clothing is young, hip, trendy; heck, the designers on Trading Spaces shop there (which I know because I saw one of my shirts on TV one memorable season). Target really does have everyday low prices (I've compared, lots of times Wal-Mart's are higher and Target often underprices Costco on a per-unit basis -- and no membership fee!). Target's employees are just nicer, I can only imagine they're better paid and benefit-ed. Target stores are just nicer places in which to shop, I don't know if it's the employees, or the customers, or the way the aisles are laid out, or a combination -- but I feel a sense of calm when I shop at Target. Wal-Mart, on the other hand, is an exercise in chaos and frustration.
Yep, I know, these things are all pretty qualitative. But when numbers fail you -- and 0.5%, for all intents and purposes, is failure -- turn to the intangibles. Brand image. Style. The way it feels when you walk in a place. The impact on your monthly budget. Whether or not you feel inspired to pick up that cute Halloween t-shirt on the way to the checkout line.
I know. I have at least four of those cute Halloween t-shirts. They're all from Target. And that's why I think Wal-Mart is losing to Target.
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Reader Comments (Page 18 of 18)
1-28-2007 @ 11:56PM
Dianna said...
I love Walmart but the store I shop has been out of stock on so may items that the shelves look empty. I wasn't suprised to see many aisles blocked with pallets before Christmas. You couldn't get to any merchandise on the shelves in those aisles. I went across the street to Target to get what I needed then to the Food Lion next to Target. The only problem with Target is that they are not a 24hr store. I prefer to shop after midnight. Rarely any crowds.