More Shoppers Head to Target, Fewer Go to Walmart
A higher percentage of Americans shop at Walmart than Target.
But, according to new research, the number of people shopping at Walmart this
holiday season is down pretty substantially from last year while those going
to Target are way up.
According to a survey of 1,000 consumers by America’s
Research Group, 20.6 percent of consumers have headed to Target since Black
Friday compared to 13.9 percent for the same period last year. At Walmart the
number dropped from 43.8 percent in 2009 versus 32.7 percent this year.
"The Walmart news is big news. Americans have stopped shopping Walmart
in droves and are suddenly heading out to Target," said Brit Beemer, founder
and chairman of the research firm, said in a statement. "This is a big surprise
as well. One reason may be that Target has done a better job of advertising
their offerings, thus
making them a lot more appealing. And Americans love the trendier approach
to clothing at gift-giving time. They are also offering new, innovative ways
that consumers can spend less."
"Walmart is not doing very well with its apparel this year," Mr.
Beemer, told the Pioneer Press. "I’ve said the first part of Christmas
was going to be big-ticket items, primarily electronics, where Walmart really
excels. But after that, consumers are going to go to other things."
Discussion Questions: What do you make of the Target and Walmart findings
of America’s Research Group?
- Survey: Target besting rival Wal-Mart this holiday season – Pioneer Press
- According to Britt Beemer’s ARG/UBS Christmas Forecast Out Today Americans
Continue to Break Forecast Records As Never Before!! – America’s Research
Group - Retail researcher says shopping up at Target last weekend, down at Wal-Mart
– The Oregonian
As with yesterday’s survey data about smart phones, I’d like to see some sales data that backs up the information about Target and Walmart. Since Walmart doesn’t report comp sales by month, it’s tough to compare their November performance with the strong outcome at Target. And “intent to visit” (or reported visits) don’t necessarily equate to sales unless we know what’s in the consumer’s shopping cart.
Despite these reservations, it’s clear from Target’s YTD comp sales compared to Walmart’s numbers that they are delivering a stronger performance this year. The discount customer is showing signs of being more aspirational, spending more on apparel and other discretionary goods (a weak spot for Walmart) and generally giving herself “permission to spend” within a household budget.
The surprise in Walmart’s weak numbers is its failure to recapture consumers who had traded all the way down to dollar stores, perhaps the weakest segment of the retail business right now. It speaks volumes about Walmart’s continuing struggles with softlines as well as the costs of its SKU rationalization program to the top line.
Consumers headed back to Target is significant in that it generally would mean that the purse strings of average Americans are loosening on non-essentials like apparel and home goods.
Walmart’s biggest differentiator from Target is consumables (groceries) as well as basics, which I would think would remain fairly constant–can’t imagine them dropping off much. But the fact that “other” categories are picking up means a lot, especially to specialty stores, who’ve been nailed in the past 3 years.
It could be a good Christmas for retailers (with this weather, online sales too).
In my opinion, Walmart will do absolutely fine this holiday season, as they do all year, because they are EDLP on everyday items throughout the store. However, Target might be performing better than expected for this holiday season because Target is doing an amazing job with holiday advertising and because Target has the image for carrying more upscale merchandise than Walmart, which might be particularly important for gift giving. As the economy improves, albeit ever so slowly, Target becomes the affordable “nicer gift” store for thousands of consumers this season.
Same-store sales trends have been demonstrating for some time that Target is gaining traffic while Walmart is losing traffic. This probably reflects Target’s successful branding of itself as a slightly more upscale destination than Walmart, as well as an assortment that is a little more geared toward name-brand items. Also Target has not received anywhere near the negative publicity about its business practices that Walmart has. Target’s success in stealing Walmart shoppers is live proof that branding is everything.
For those who know me, I’m cheap. Target has suddenly gotten my attention. Finally they are getting it when it comes to price. They ad match, pricing seems more in line with Walmart, and their new RedCard gives me another 5% off at the cash register along with giving 1% to my old high school back home. The quality of employees at Target seems to me to be a slight step up in class compared to Walmart. I still feel a little creepy about buying perishables at Target (as I do in Walmart too), but most certainly I’m making more shopping trips to Target and less to Walmart. Target has remodeled a lot of stores to the PFresh format and consumers are now realizing that TARGET SELLS GROCERIES.
Target has re-captured its mojo. They have become very competitive, have the RedCard program, have better non-food merchandise, have cleaner stores, good employees and they are expanding their store count. Target’s ads have also improved. These factors are bringing new customers into more inviting Target stores and they apparently like what they are experiencing. Meanwhile, Walmart is a magnet for those who believe that Walmart is always lower priced…but are they still in all ways?
There was a time not so long ago when our sheer hunger for “stuff” was so insatiable that we’d brave the wasteland that is the Walmart shopping experience to get it. As long as we got our cheap fix we’d tolerate just about anything.
Not so anymore. We’re simply becoming more selective and thoughtful about what and where we buy and Walmart is paying the price for the shift. Increasingly the consumer is trading up and down but not into the middle, where Walmart now, ironically finds itself–sandwiched between the dollar stores on one side and Target, Kohl’s etc. on the other.
Add to this the fact that the financial impact of this recession and sluggish recovery has been felt most sharply among those consumers that Walmart likely considered core to their model, and it becomes a pretty foreboding picture for the future of their business.
A survey of 1000 customers? Thanks, but I think I’ll wait for the comps before lauding Target and deriding Walmart!
I’d like to see what the 3 year trend is on this comparison. The last two years had a “the sky is falling” feel to them, which drives consumers to the lowest price as a primary decision factor (good for WMT, bad for TGT). My sense is that this year, the consumer is feeling a little less nervous (good for TGT, bad for WMT).
I think Target’s gain is some of Walmart’s loss but I also think customers are trading down from Macy’s and other department stores. Target looks and feels way better than Macy’s, even Nordstrom Rack. Nordstrom Rack, IMHO, is a pain to shop and so not worth it. Much more fun to shop at Target.
I suspect, and I’m sure the numbers will suss this out, that Walmart has lost a lot of their base to Aldi’s, Big Lots, Dollar Stores and Target. Walmart’s pricing is higher than it used to be. And they have contributed mightily to their customer bases not having jobs. It’s called “What goes around, comes around.”
In the last half of ’09, 25% of all homes relied on a cell phone only. This number has probably increased in the last year. What did this survey do to compensate for the obvious potential for skewing of the results away from families with constricted disposable income?
Though I’ve long been a Target enthusiast–their gawdawful Xmas ads notwithstanding–I would take these survey numbers with a grain…no make that several bags of salt: they certainly don’t reflect actual sales numbers, so I’m not sure what, if any, meaning we should attach to them. Not to pick on this particular organization, but with so many “research” groups competing for attention, it seems that some of them create surveys with the objective of creating controversy.
These are dramatic numbers and while there is no question that Walmart’s traffic counts have dropped, it seems improbable that it dropped this much.
Walmart is experiencing the lag effect of its previous merchandising and marketing strategies. While Bill Simons direction has broadened assortments and increased promotional product placements on end caps and in the aisles it is possible that it may take several seasons before they see a significant increase in traffic and sales.
Walmart has lost a portion of its core shopping base to the Discount marketplace (Dollar General, Family Dollar, Aldis, etc.) as well as to category specific retailers such as Home Depot, Lowe’s and Dick’s, to name a few.
It takes time to change customers perceptions and convince them that Walmart is the destination for all of their needs. This can only be accomplished by delivering consistency in a broad assortment at everyday low prices.
For Mr. Marek’s benefit and some others also, Target’s same store sales were up 5.5% in November and up 1.7% in October. Walmart’s fell 1.3% for the third quarter and were negative for now six straight quarters. I suppose one could wait for the December results, but I like Target’s trend. The survey does seem to bear that out also. However, a survey is a survey.
Target’s trend is good. Their recent ads leading up to Black Friday were a scream! Their selection and store conditions are improving. They are also gaining ground from my view on price image. While Walmart may always win the perception battle on price, all Target needs to do is improve on it–not win.
Target is showing good trends. They are definitely a more enjoyable store to shop. In my most recent visits to three different Walmart locations, I couldn’t wait to get out! Conditions were awful, out-of-stocks were high, and they felt like a caricature of themselves.
Mrs. Scanner got me to Target last weekend. It had been a little while. It was improved over even back-to-school time. Target has stated themselves that they are working on continuous improvement and they are making it noticeable. If I noticed, my guess is that others are noticing also.
This is all not a prediction of the fall of the Bentonville Empire. It is an acknowledgment by results and observation that Target’s trends are better.
It’s also worth noting that Walmart predicts a reversal of their trend in the fourth quarter. Some Wall Street analysts do not agree and see their recent trends continuing. We’ll only have to wait a few weeks to see who was right. What will we say if both improve?
I have no idea of the validity of the numbers presented, but for sure, shoppers are aspirational–always have been and always will be. That means that even when “the sky is falling,” people are looking for brighter skies and better days. So, when a few years back, a press interviewer asked me if I didn’t think Walmart, in upscaling a bit, wasn’t leaving their demographic behind, I pointed out that au contraire, Walmart’s demographic had continued the inexorable ascent of shoppers to higher ground. If Walmart didn’t move, their demographic would leave them behind.
Curiously, it is the competitive forces of Walmart and Target that drive the aspirations of the hoi polloi, while the controlling political forces of “progressives” seek to suppress destiny.
Why are customers leaving Walmart? I think the answer is simpler–better overall customer experience.
Target offers higher quality goods, competitive prices, shorter check-out times, more staff on the floor to assist customers, a better return policy, and cleaner stores.
With everyone so crunched for time, convenience is important. People are willing to spend a few extra dollars to avoid standing in a line 10 people deep and waste their time.
Combined with the other advantages Target offers I know where my money will go….
Am I reading these statistics wrong? Or is it a sensationalistic headline grabbing our attention. The statistics show Walmart’s numbers are presumably lower; but there are still more shoppers per thousand surveyed going to Walmart than Target.
I am pleased Target’s numbers are rising; but let’s not have a pity party for Walmart just yet. Mr. Sam is not conceding anything this early in the season.
During this holiday season, items like Consumer Electronics are quite dominant. Here, Target has done an immense amount of work. Consider that this year they were able to offer iPhone and smartphones from all major carriers; last year they had no offer at all. This year, they had strong displays of Kinect and Sony Move, much stronger than those at Walmart. Also, they had the 5% Red Card promotion and were sharp on price. Taken together, this was a huge mover toward Target and we can see it in the sales results for categories like TV.
Interestingly, there is far more alignment in the CE space for the respective demographics of Amazon and Target and Best Buy than for Walmart. With no disrespect, Walmart is continuing to pay for alienating their core consumers with high/low pricing and trying to move upscale. They neither convinced higher income shoppers and still lost the others. Walmart made gains by size as with their store count they always had more consumer footsteps than any other, but in the current environment that is not enough alone as consumer remain very price conscious at all levels and surgical in buying. We know that Walmart revenue in CE was down so far for the holiday and due to mix down more than most others like Target.
Target had easy comparisons to be fair, but on an absolute they won and Walmart lost. However, the real truth for CE and other areas was that online commerce won. While Walmart online sales for CE rose about 30%, so Amazon rose more and this is a small share for Walmart and to some extent Walmart competing only benefited them more. Overall, online spending on CE rose to nearly 25% of sales for the BF four day weekend, up from 17% last year. Now that is dramatic. So, while we always will be interested in the competition of these two, the playing field is changing