Investopedia On Target -- March 23, 2016

Starbucks closes all stores in Belgium. There are reports that ISIS has declared war on Europe, but might be targeting Americans. Fortunately it's just the JV team. President Obama should have no trouble taking them out.

************************************

Target Firing on Three Cylinders

We have a Target big-box store about five minutes (by bicycle) down the road from us. It's a bit of a pain, but we also have a Wal-Mart down that same road about 20 minutes from us (again, by bicycle).

Target used to be my go-to store when I needed something, let's say something for the bicycle or a kitchen utensil or even WD-40 oil. But recently I've noticed that Target has less and less the things I was looking for, and these are pretty basic things. I assumed it was just me.

But now Investopedia writes:

In 2015, Target announced that it would be focusing on four key segments of its retail operations, called signature categories. In that same statement, the company pledged to modify the grocery departments. However, in 2016, the company decided not only to focus on its signature categories of style, baby, kids and wellness, but to also expand fresh grocery product offerings as well as cut the number of products offered store-wide to focus on its best-sellers.

There are a number of long-term problems with this strategy. First, by cutting the number of products, Target is likely hoping to achieve similar cost-savings that Costco Wholesale Corp enjoys. The difference between the two is that Costco has an abnormally low number of SKUs in store, and Target cannot feasibly reduce its number of products that low. Instead, by culling moderately successful products, Target will create a situation where customers can no longer find everything they’re looking for, losing Target its status as a one-stop shop. 

How interesting.Wal-Mart has become not only my one-stop shop, but also my first choice when looking for something. Our daughter says Wal-Mart is also her go-to store; she no longer shops at Target. 

Interestingly enough, except for busy shopping days or busy shopping hours, I have found the checkout lines shorter at Wal-Mart than at Target.