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Thursday, November 17, 2022

Walmart Vs Target -- November 17, 2022

3Q22:
Walmart: an incredible third quarter.
Target: an awful quarter.

Link

Four differences between Target and Walmart:

Grocery routine vs occasional stop:
  • Walmart gets a far bigger share of its sales from groceries than Target, which is helping it draw shoppers looking to save money as inflation squeezes budgets.
  • Groceries account for 56% of Walmart’s annual revenue, compared with just about 20% at Target, according to company filings. Walmart is the country’s largest grocer by revenue.
Low prices vs fun finds:
  • Walmart is known for its mantra of “everyday low prices” and its focus on value has become synonymous with its name. Founder Sam Walton built the company on a no-frills approach aimed at making groceries and other products more affordable.
  • As Americans increasingly watch their budgets, the big-box retailer’s reputation as a discounter is giving it an edge. And the company has flexed its ability to use its size and scale to keep prices low.
  • Walmart’s McMillon speaks often about the company being a price leader — and more recently, an inflation fighter. For Thanksgiving, the company said it would hold down the price of foods like turkey and ready-to-heat macaroni and cheese to last year’s levels. [Walmart has succeeded.]
Planned purchases vs impulse buys:
  • About 21% of sales at Target come from unplanned purchases, according to GlobalData research from before the pandemic. At Walmart, the figure is about 12%.
  • In an inflationary environment, those shopping sprees – and impulse buys – become a tougher sell.
Shopper spending power:
  • During the pandemic, Target benefited from its middle-income customers, who suddenly felt flush with cash from stimulus checks and the money they weren’t spending on dining out, travel or sending kids to summer camp.
  • Those shoppers helped Target’s sales grow dramatically during the pandemic. Its annual revenue rose about 36% to $106 billion in 2021, the most recent full fiscal year, from 2019.

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