1/22/08

Why Target is losing market share to Wal-Mart

Here is an extract from an interesting article, the entire column can be found at the listed link:

Wal-Mart Weekly: Why Target is losing market share to Wal-Mart

http://www.bloggingstocks.com/2008/12/22/wal-mart-weekly-why-target-is-losing-market-share-to-wal-mart


"After shopping at a few local SuperTarget locations over the last few weeks, I compared several food and general merchandise items between Target and Wal-Mart and it was easy to see why hard times have fallen on Target recently. From bottled water to ravioli to toilet tissue to flat-screen TVs, Target was consistently higher on its prices than Wal-Mart. Anywhere from a 5% to a 15% price increase was seen on these items (same exact model number in some cases), and this during the busiest shopping month of the year.

Has Target increased prices or has Wal-Mart steadily lowered them to keep the low price perception alive? It's hard to say which, but in both instances, the Target locations were decently busy (but not packed). The two closest Wal-Mart stores, by comparison, were incredibly busy. Just a walk through the aisles was enough to confirm this. Either Target was not interested in competing on price with Wal-Mart this holiday season, or it was interested in profit instead of same-store sales figures on a month-to-month basis. But, with the holiday retail shopping season about to wrap up this week and next, what is Target's plan in 2009? The recession will be lingering around quite a while, and shoppers may still continue to prefer Wal-Mart for their purchases as much as possible. Where does that leave Target? On interesting ground."

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