Retailers, consumers and prices
Check Out Line: Off Target
Check out the other discounter.
The wisdom in the struggling U.S. economy is that discounters are doing well as consumers trade down to try to save some money. It has worked for Wal-Mart, which saw first quarter profit rise 7 percent, while same-store sales rose 2.9 percent.
Not so much for Target, though.
That discount retailer today posted a 7.5 percent decline in net income for the quarter and its same-store sales dipped 0.7 percent and were weaker than the company had expected.
For a time, Target attracted customers with an approach that became known as “cheap chic,” with designers like Isaac Mizrahi developing exclusive clothing lines for it. At the same time, Wal-Mart has stumbled with its own attempts to upgrade its apparel offerings.
But even before the economy went south, Wal-Mart refocused on offering lower-priced value, a move that has helped the company in an economy that many say is in a recession.
Meanwhile, sales are falling short of Target’s target. And Mizrahi has left to become creative director at Liz Claiborne.
Right now, it looks like the dog days for Target, while Wal-Mart sports a smiley face.
Also in the basket:
Home Depot posts quarterly loss
Saks Inc posts higher quarterly profit