 |
| image from webpicks.com |
Wal-Mart and Target: A tale of 2 discounters
Two discount retailers but with very different customer bases. How each is fairing in these past couple of months have been indicators on how each customer base is financially.
Wal-Mart, who's customers have an income range of 30k to 60k, has been showing some signs of falter. For stores open for more than a year, there was a growth of 1.5%, .3% below estimates and a slow down from the 2.2 and 2.4% from earlier quarters of this year.
Target on the other hand, with a consumer median salary of 64k, has been fairing quite well. It's year or older stores are increasing sales by 2.9% and is surpassing expectations with an increase in earnings at 1.64 to 1.74 vs the investor prediction of 1.51. A lot of this increase will be due to high expectations for the holiday season with their loyal higher income customer base. Wal-Mart on the other hand increased their holiday numbers by lowering the cost for layaway and starting earlier on their layaway program.
Are the higher crusts of the middle class doing better? Are the lower income Americans doing worse? Are those Americans who were hit hard by the recession regaining their income and moving back from Wal-Mart to Target?
Obviously we'll need more data than a few quarters to determine all this activity but it is an interesting "back of the envelope" study.
No comments:
Post a Comment