Target continues to post record strong earnings, even without special gains from selling businesses or opening new stores. In the cut-throat big box retailing world, sales at stores open at least a year rose 4.5%, which continues to outpace key rival Wal-Mart.
Why is Target continuing to achieve such success? How about an in-store experience for consumers that beats Wal-Mart hands down, a more appealing product and brand mix, innovative merchandising, and stronger targeting of specific market segments. In other words, Target recognizes that it’s a retailer creating a fun experience for consumers – not a low cost import product distributor outlet as Wal-Mart seems to see itself more and more these days.
In the short term, Wal-Mart is clearly a major force to reckon with - and many consumers still respond favorably to the availability of low priced junk. But, no business model succeeds forever - remember back when another stale big box behemoth named Kmart thought they were invincible?
Some time soon, Wal-Mart will wake up and find that thousands of frumpy retail outlets packed to the ceiling with cheap knock-offs from India and China just isn’t cutting it with mainstream middle America. Anybody looking for empty warehouse space?
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