NEW YORK — Target Corp. is going bananas to keep up with Walmart Stores Inc.
The discounter, known for stylish towels and jeans, has long sold groceries. But it is barely holding onto its customers while its chief rival, Walmart, is rapidly picking up new shoppers as its powerful low-cost message resonates in the recession. So Minneapolis-based Target plans to stock more fresh food — including bananas — and play up its low prices.
Meanwhile, Walmart, the world’s largest retailer, is expanding its selection of nonessentials such as home furnishings, while improving the quality of its store-brand foods.
Activist shareholder William Ackman has for several months been using Target’s struggle with Walmart as ammunition to push Target shareholders to change its board. He has said his five picks, including himself, would provide fresh perspective, increase profitability and re-energize stock, which has dropped 42 percent from its $70 high in July 2007, though it since has rallied.
What should they do?
Facing criticism from Wall Street analysts who believe it’s been late to respond to the recession, Target is becoming more vulnerable. But New York-based retail consultant Walter Loeb is not convinced that Ackman should get involved.
Target’s cheap chic mantra — its advantage in boom times — became a drag in late 2007, as the recession began and shoppers focused on basics.
At the same time, Walmart, based in Bentonville, Ark., found a balance of merchandise and marketing to enhance its renewed focus on price.
by the associated press
The discounter, known for stylish towels and jeans, has long sold groceries. But it is barely holding onto its customers while its chief rival, Walmart, is rapidly picking up new shoppers as its powerful low-cost message resonates in the recession. So Minneapolis-based Target plans to stock more fresh food — including bananas — and play up its low prices.
Meanwhile, Walmart, the world’s largest retailer, is expanding its selection of nonessentials such as home furnishings, while improving the quality of its store-brand foods.
Activist shareholder William Ackman has for several months been using Target’s struggle with Walmart as ammunition to push Target shareholders to change its board. He has said his five picks, including himself, would provide fresh perspective, increase profitability and re-energize stock, which has dropped 42 percent from its $70 high in July 2007, though it since has rallied.
What should they do?
Facing criticism from Wall Street analysts who believe it’s been late to respond to the recession, Target is becoming more vulnerable. But New York-based retail consultant Walter Loeb is not convinced that Ackman should get involved.
Target’s cheap chic mantra — its advantage in boom times — became a drag in late 2007, as the recession began and shoppers focused on basics.
At the same time, Walmart, based in Bentonville, Ark., found a balance of merchandise and marketing to enhance its renewed focus on price.
by the associated press
No comments:
Post a Comment