Ted Hurlbut

Target Invites Direct Comparison with Wal-Mart

February 24, 2010

FROM RETAILWIRE:
Target made its way to the upper echelons of American retailing by presenting its differences with Wal-Mart. Now, the company's CEO believes it should go head-to-head.... Will 2010 be Target's year? Is it ready to invite direct price comparisons with Wal-Mart?      [more...]

I've felt for a while now that Target was caught in a trap between Walmart and Kohl's. They'd like to be thought of as a lower priced fashion alternative to Kohl's, but the price spread isn't great and Kohl's does it better. On the other hand, Walmart simply does everyday basics better, and cheaper.

The idea that the way out is to go head-up against Walmart not only negates all of the image marketing they've been doing, but Walmart also has far deeper pockets if Target's idea is to compete on price.

It seems to me that the better strategy is to re-emphasize and re-invigorate their fashion offerings and focus on taking share from Kohl's above them. It's not a great alternative, but it seems more prudent than going after Walmart. That's why I feel like they are caught in a trap, with no immediate path out.