Wal-Mart vs. Target vs Walgreens vs Costco

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From a NYTimes article:

Though Wal-Mart is three times larger than its next biggest retail rival, Mr. Scott appears to be preoccupied with competitors whose individual store sales are growing faster than Wal-Mart's — namely Target and Walgreens.

Asked about Wal-Mart's stock price, which has fallen 11 percent in the last five years. Mr. Scott said: "You cannot have Target or Walgreens beating you day after day after day." Mr. Scott wrote that one reason Wal-Mart's same-store sales were growing more slowly than Target's was that Wal-Mart's customers earn less and have been squeezed worse by soaring fuel prices.

"Wal-Mart's focus has been on lower income and lower-middle income consumers," he wrote. "In the last four years or so, with the price of fuel being what it is, that customer has had the most difficult time. The upper-end customer got a tremendous number of tax breaks about four years ago. They have been doing very well in this economy."

He said having to pay $50 to gas up a car did not change anything for rich customers, but did for those who didn't earn a lot. "It changes whether or not you go to the movie, whether or not you buy new sheets, whether or not you go out to eat."

At several points, Mr. Scott addressed criticisms that Wal-Mart health plan was too stingy toward its employees. He said that Wal-Mart's health plan "stacks up very, very competitively" with other retailers. In a knock at companies that provide more generous benefits, Mr. Scott wrote: "One of the things said about General Motors now is that General Motors is no longer an automotive company. General Motors is a benefit company that sells cars to fund those benefits."

OK. Let's get this straight:

1) Wal-Mart is targeting lower income and lower-middle income consumers, i.e. its employees.
2) Wal-Mart won't pay its employees a decent salary w/ benefits.
3) Wal-Mart says its same-store sales are growing more slowly than Target's is because Wal-Mart's customers earn less and have been squeezed worse by soaring fuel prices.

Sounds like one of those destructive cycles brought about by narrow-thinking from upper-management...

Let's look at two other alternatives: Costco and IKEA.

Wake up Wal-Mart. Get some values.

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This page contains a single entry by Christian Sarkar published on February 17, 2006 12:01 PM.

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