Are Target and Walmart direct competitors

Wal-Mart remains on the road to success

In 40 years Wal-Mart Stores Inc. has grown to become the world's largest company with sales of $ 250 billion and approximately 1.4 million employees. The discounter has left its direct competitors of the same age, namely Kmart and Target, far behind. Wal-Mart shows no signs of fatigue.

While other US retail chains are reorganizing, going through Chapter 11 proceedings, “shrinking back to health” and constantly trying out new structures and strategies, Wal-Mart, now the company with the highest turnover in the world, continues to expand tirelessly and extremely successfully according to the original concept. Sam Walton's idea was to offer the average American all the essentials of life at the lowest possible prices under one roof on the green field, far from the competition. The slogan “Every Day Low Prices” is still the leitmotif, this year Wal-Mart plans to pass on at least $ 10 billion in productivity gains to its customers. But since Sam Walton opened his first discount supermarket in Rogers, Arkansas in 1962, the nuances have shifted a bit. Wal-Mart continues to focus primarily on the working class, households with an annual income of between $ 25,000 and $ 50,000, but no longer exclusively. For a while now, wealthier classes have also been attracted by higher quality goods. More recently, Wal-Mart supermarkets can also be found in the affluent suburbs of New York, Dallas or Atlanta, but Wal-Mart continues to avoid the big cities themselves.

Slow start

In the 1960s Kmart, Target and other discount stores were much faster with their nationwide expansion. Walton, who started his career as an apprentice at J. C. Penney and later ran a number of Ben Franklin stores - so-called Penny Stores - under the name "Walton 5 & 10", was initially only able to raise money for 15 supermarkets. The company, incorporated as Wal-Mart Stores in 1970, received an injection of capital only in 1972 when it went public (the share had already been traded over the counter). Revenue at the time was $ 44 million. Seven years later, Wal-Mart passed the billion mark with 276 stores. In 1990, the company took the lead in US retail chains, and in fiscal 2002 (ended January 31), Wal-Mart overtook Exxon as the public company with the highest sales in the world, most recently with a business volume of $ 246.5 billion. Wal-Mart operates over 3,500 stores in the United States; more than 1500 of these are traditional discount stores with an average sales area of ​​10,000 m [2] and an assortment of 80,000 articles. In 1988 Wal-Mart opened the first “Supercenter” and has since built 1,300 more. The supercenters are twice the size of the discount stores, and they also carry a full range of groceries and a total of around 130,000 different items. In 1983 Wal-Mart started a new line with Sam's Club. It now owns 526 such membership-based cash-and-carry stores and has revenues of $ 32 billion. Last year, however, it was caught up with the inventor of this concept, Costco, in terms of sales (see table).

Powerful expansion abroad

Wal-Mart began expanding across borders in 1991 with the opening of a supermarket in Mexico. There are now 602 Wal-Marts in Mexico. Wal-Mart has a strong presence in Canada, where it acquired 122 Woolco stores in 1994, in Great Britain, where it acquired the ASDA Group with 229 stores four years ago, and in Germany, where 21 Wertkauf stores and 74 Interspar units were taken over. Wal-Mart is also present in Argentina, Brazil and Puerto Rico, as well as South Korea, China and Japan. With around 1,300 stores, international sales were most recently $ 40.8 billion. Although Wal-Mart made a number of acquisitions, most of the impressive growth was generated internally. Last year Wal-Mart invested $ 9.3 billion and expanded its retail space by around 450,000 m [2]. This year the budget is $ 11.5 billion; 45 to 50 new Wal-Mart supermarkets, around 210 supercenters, 15 to 20 neighborhood markets (drugstores / groceries), 35 to 40 Sam's clubs and 120 to 130 international locations are planned. Divestments and store closures are a downright rarity at Wal-Mart, but last May she sold her grocery wholesaler McLane ($ 22 billion in annual sales) to Warren Buffett's Berkshire Hathaway.

"Retailer of the Century"

Since 1997 Wal-Mart has been one of the 30 Dow Jones Industrial companies; at that time it replaced the department store group Woolworth. Since 1971, Wal-Mart has completed 11 2: 1 stock splits. The share price is up 16.5% this year, more than the Dow Jones Industrial (+ 11.6%), and the market value is currently $ 257.5 billion. For years, Wal-Mart has been at the top of the Fortune list of America's most admired companies. She was also named “Most Admired Retailer” by “Fortune”, and in 1999 the company was named “Retailer of the Century” by “Discount Store News and Mass Retailers”. Wal-Mart has around 1 million employees in the US and around 400,000 abroad, making it the largest private employer. The headquarters in Bentonville, Arkansas, emphasize the important role as an employer for minorities and display numerous awards for these groups. In fact, Wal-Mart also appears on the annual Fortune list, “The 100 Best Companies to Work for”. Wal-Mart received an award five years ago from Catalyst, an organization that promotes women, for having two women on its board of directors. This hasn't stopped a group of female employees from filing a class action lawsuit against Wal-Mart for unequal pay and lack of advancement opportunities. With 700,000 potential plaintiffs, this could lead to the largest discrimination case in American history and the threat of billions in damages. Wal-Mart has switched law firms twice and is not commenting on the matter.