This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.
America use to have the battle of Sears vs. Kmart back in the 1970s and 1980s. Well, both are now combined into one entity named Sears Holdings Corp. (NASDAQ: SHLD) which, frankly, is still struggling for its identity. The new king of the hill from a revenue perspective is Wal-Mart Stores Inc. (NYSE: WMT). No question, with revenues this fiscal year ending January 31, 2008, expected to be $380 billion, Wal-Mart is the behemoth. The largest retailer in the world, period. But I wouldn't touch the stock. The comment most attributed to Wal-Mart is "it's tired." The stores look worn and the shopping experience arises more out of necessity than desire. Also, with a $200+ billion market capitalization, moving the needle even just 10% is quite challenging.
Why bother with a company that will have a very difficult time growing its revenue and earnings base? Why bother with a company that is being attacked, successfully, on both sides of its key businesses: the discount retailer and the warehouse stores? Why bother with a concept that has saturated its market with more than 3,200 stores in place? The only sure-fire way to grow the earnings base is through same-store-sales monthly increases, and yet, Wal-Mart is struggling in this capacity. The answer is not more stores, and pricing increases go against the Wal-Mart credo of everyday low prices. Sure, shareholders of the past 30 years have been exceptionally rewarded and Wal-Mart is the quintessential American brand, but there is a far better and exciting story for shareholders going forward. That story is the rising titan, Target Corp. (NYSE: TGT).
Target is a refreshing, exciting concept with creative and skillful advertising. The big red-target sign is now totally ubiquitous with Target. In fact, Target recently received a patent for the shade of red used in its logo.The fashion offerings are not Nordstrom's quality, but they are innovative and very popular. The shopping experience at Target is pleasant and unhurried. The stores are brightly lit, clean, and clear of clutter. The store count is 1,488 in the United States, with room to double that base. Target has beaten Wal-Mart on monthly same-store sales 25 of the last 26 months. It's no accident. The Target customer is from every socio-economic background, and Target has very successfully implemented the Target Visa card. The credit operations are profitable and becoming the goose that lays the golden egg. Customers are loyal to both the store and using their Target credit card.
Target is looking for revenues this fiscal year ending January 31, 2008 of $65 billion and earnings per share of $3.60 to $3.65, with excellent growth for January 2009: revenues of $73 to $74 billion and earnings per share of $4.12 to $4.15.
Target is fast becoming the choice for consumers, but it should also be clear choice for investors as well.
Georges Yared is the author of Stop Losing Money Today and Baby Boomer Investing. Please visit www.georgesyared.com
Be sure to vote in our poll for Target or Wal-Mart as your preferred brand, and let us know why you love it in the comments. Results of all Battle of the Brands match-ups coming soon.
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Reader Comments (Page 4 of 4)
5-03-2007 @ 10:33AM
Sherry said...
I voted Target;everybody loves Target, but I usually spend my hard earned money at Walmart because the prices are much lower, Also I tend to be drawn in by Target's marketing and spend way more on impulsive items. Walmart has become more distasteful lately in their display of goods and the shelves are more and more lacking in what I came for! I only go to Target now when I have extra money to spend!
5-03-2007 @ 10:25AM
Tim Orris said...
One complainer states. "While waiting in a very long line, I wondered why anyone would shop there" , You are there, and a lot of others.I have never been in a line longer than 5 minutes at a Wal-mart.
Another complains about how dirty show is while shopping late at night, It is hard to maintain pristne conditions while open 24 hours, especially with all the slip and fall attorneys flooding the airways looking for deep pockets. Wal-mrt cleans spills as they happen, and does major cleaning early AM between 3 and 5 am . With working class people and family tracking dirt and oil in around the clock, I am amazed at how clean they keep the store. I travel 360 days a year through 27 states and mainly do my shopping after 11PM . I depend on Wal-Mart , 7-11 , CVS and Walgreens to keep me running
5-07-2007 @ 11:50AM
Dr, I.G. said...
Thank you for this opportunity. I am an antiWalmart person. I have family and friends who work at Walmart and the stories and experiences they share are unbelievable. The few times that I have gone into a Walmart store was utterly sickening. Clutter, dirt, odors, employees who will look at you and sneer--ignorance about store merchandise, etc. all made me sick. I just walked out. Yes the prices are a penny or two lower on some items, but to me it's not worth the suffering. I prefer Target any day of the week. I do shop at Target during holiday season and for certain other special events. At least, you can get help when you don't know where you can find a certain item. A Walmart hater!!
5-19-2007 @ 9:49AM
curt said...
I will go into a Walmart as only a last resort, I find the stores filthy, with junk all over the floors, Many brand names that I have never even head of before, or can't read because there in Chinese. Walmart is ruining the small business through out the country. I will gladly pay extra to a local business, knowing I am supporting my community and neighbors. When Walmart comes crashing down, it will be a great day for the USA.
6-01-2007 @ 3:39PM
Surekhak said...
I never liked Walmart.. it has no quality. Target has quality and seems like typical American store. I never shop at Walmart, even if the prices may be a bit lower that other stores. Walmart definitely made China rich...I am a proud American.
6-01-2007 @ 4:23PM
trish73 said...
First of all, #16, has a nerve, calling names like "Trailer Trash," She/he knows so much about it, that must be where "it" hails from. Do you know anyone who lives in a trailer? (Mobile home) Have you ever been in a mobile home? I can answer, yes, on both counts. I have seen mobile homes, that put regular homes to shame. They are luxurious, large, with both, a living room, and family room, with working fireplaces. Formal dining rooms, two to three bathrooms. You are nothing but a pin-headed moron. Go look for yourself! There are people that live in mobile homes, just like the scum that live in a regular house, and it looks, (from the outside) like they have lived there all their lives, and haven't touched the yard, or picked up a piece of paper, dirty cigarette butts, tossed everywhere, some place you may be proud to live in, because, I think you probably do, live in a rat's nest. Were you one of those, on the Springer show, with no teeth, dressed in rags that were way too tight for you, hair that needed washing, and the body, the same way. People like you make me sick! I worked for Social Services, for 20 + years, and I saw it all, believe me. And, you sound like one of those, that thinks the world owes them a living! Got to Target, Wal-Mart, or go to hell, but, do not pick on people who happen to live a lot better than you do, whether, it's in a mobile home, or a house. You never know what's in your future!
6-01-2007 @ 4:19PM
trish73 said...
Post Script: you may prefer Target, but, I prefer Macy's, Nordstrom's, Saks, Bloomingdale's, etc. Need I go on??
6-01-2007 @ 4:37PM
Tiffany said...
I used to shop at Wal-Mart forever ago. I despise the place. Not only do they force smaller hometown business to close, screw their employees regularly on benefits, etc., and have the RUDEST employees I have EVER had the misfortune to deal with, they are NOTORIOUS for restocking broken/damaged/returned items as though they are brand new. I know this, because it happened to me! I bought a swing for my daughter when she was a baby. I drove about 15 minutes to my home and opened the box. Inside was a poop stained, crud encrusted mess that they refused to take back initially even though I had my receipt!! After a VERY heated discussion with some pre-pubescent idiot they called a manager, I got my money back...and then he had the NERVE to tell me I wasn't welcomed back in that store any longer!!! I HAPPILY told him, his store and all of the Wal-mart chain were no longer welcomed in my LIFE!! I have been an AVID Target customer ever since!
6-01-2007 @ 8:27PM
Michelle said...
TARGET IS DEFINITELY ONE OF MY FAVORITE STORES TO SHOP AT! TARGET is a bright, clean, clutter-free, pleasant store to shop in!! TARGET carries quality name brands & other really nice & unique items!!! I am very impressed with this store! The people that work there are always nice & helpful!
TARGET'S WEBSITE is also fun to shop on! I only have one suggestion: I wish that their eating area would be more pleasant & private, & the food that they offer would be healthier & better quality.
TARGET IS THE BEST!!!!
6-01-2007 @ 9:09PM
Michelle said...
WALMART IS LIKE BEING IN A THIRD WORLD COUNTRY!!!!! Where in the hell are the good people? What is this country coming to? This store is a breeding ground for bad & really dirty people! It's really scary seeing what low life really exists! The MINORITY WORKERS are very FRESH & RUDE! Who in the hell do they think they are? Why aren't these people fired?I also can't stand being greeted entering their dumpy store by their VERY ANNOYING EMPLOYEES! THERE IS NOTHING WELCOMING ABOUT WALMART! GET OUT OF AMERICA YOU ROTTEN NO GOOD FOR AMERICANS BRINGING THE QUALITY OF LIFE TO POVERTY LEVEL DUMP YOU CALL GOOD FOR AMERICA'S ECONOMY SO-CALLED STORE!!!!! WALMART IS A DISGRACE TO THIS COUNTRY!!!!! WALMART IS A DISEASED, FILTHY, LOW LIFE INFESTED, CLUTTERED, FOREIGN POOR QUALITY MERCHANDISE, SELL OUT THIRD WORLD COUNTRY STORE!!!!! WALMART IS THE DEVIL'S STORE!!!!! If walmart would give their merchandise away for free, I STILL WOULDN'T GO IN THERE! THAT'S HOW MUCH I HATE THAT PLACE!!!!! CLEANLINESS, PLEASANT ENVIRONMENT WITH CLEAN, EDUCATED, & ENGLISH-ONLY SPEAKING RESPECTFUL PEOPLE ARE VERY IMPORTANT FACTORS TO ME!!!!!
TARGET KNOWS WHAT REAL AMERICANS WANT!!!
TARGET GETS MY BUSINESS!!!
TARGET RULES!!!!!!!
9-13-2007 @ 8:50AM
Karen said...
wal-mart is a nightmare to shop at. They are sooooooooooo nasty, The the clerks hide from you or tell you anything to make you go away. I havent shopped in Walmart in at least a year, but I just refuse to shop at Target as they are owned by the french and are not to eager to help our troops,dont let the bell ringers at Christmas, stand near there doors,they just plain dont like americans, but they love our hard earned money. then there is Kmart, YUCK, when I think of shopping at Kmart I think of all the times I have looked and looked for someone to help me, and it's like the twightlight zone, the store has no employees, they are experts at hiding from you or there is just a handfull of employees to run the whole place. I have a friend that has worked for Kmart for 15yrs and makes a whoppin $9 dollars an hour, they treat her poorly and she has been a hard working, faithful employee. Walmart, Kmart and Target all need to get together and become one giant entity and then all the malls and grocery stores can close up. JUST KIDDING
9-14-2007 @ 11:08AM
Karen said...
The only good thing about walmart is, Sam Walton and family are true americans, and they damn well better clean up their act or face losing millions of shopper and dollars. GREED is an ugly monster to get off your back, all you have to do is look at any walmart store to see the Greed and power trip, they have totally lost the compassion and caring that Walmart USED to be famous for, I USED to be a happy shopper at WallyWorld, but now I havent stepped foot in a walmart in several years for the fact that they are nasty, run down, big box stores full of uncaring, I just work here because I cant find a better job kinda people that alot of them look like they have been on binge or just crawled out of bed, alot of the worker dont "speaka" the english ,and for that, BIG WALMART rich owners who dont give a rats AZZ about the little people, you get what you deserve. http://search.forbes.com/search/find?MT=walmart+ , read it and weep.
9-13-2007 @ 11:34PM
Irene said...
I live in the S.E. part of the US. It is Walmart's kingdom. I own their stock and have for 20 years. I HATE the place. 3 trips a year is enough for me. The trick is to get U there & U spend more $ on junk U do not need or really want. It takes a strong person to resist the visual stimulation. I hate the "I'm with Stupid" t-shirt wearing customer that Walmart seems to attract.
9-27-2007 @ 11:40AM
c aculk said...
I always shopped at Wal-mart for value and sort of shunned target because of their standards on Charity Organizations. I was told that target does not allow charities like salvation army, disabled veterans and toys for tots. I was also told they were owned by france. If anyone knows any different please let me know.
11-23-2007 @ 1:36PM
Eric Nelson said...
I do know different. Target corporation was started in Minnesota where their corporate offices are currently located. As for the stuff about charities, Target has a no soliciting policy, which is intended to prevent unions from comming in and unionizing the workers which would benefit nobody but the union organizers. To be completely fair, Target realized that they couldn't choose who they let solicit on their property, thus banning the charities from Target property. It removes the distractions for shoppers; that is why they don't play music in the stores.Target donates lots of money to schools and other good causes.