Introduction
Target and Walmart are two of the most recognizable and influential retailers in the United States, with a presence in nearly every American community. While they share some similarities in their broad product offerings and focus on value, they are actually separate companies with distinct histories, strategies, and ownership structures. In this article, we‘ll take a deep dive into the relationship between these two retail giants, exploring their origins, their competitive dynamics, and their roles in shaping the modern retail landscape.
The Rise of Target: From Local Department Store to National Retail Power
Target traces its roots back to 1902, when George Dayton founded the Goodfellow Dry Goods store in Minneapolis, Minnesota. Over the next few decades, Dayton‘s business grew and evolved, eventually becoming the Dayton Company, a leading regional department store chain. In 1938, the company launched a new discount store concept called Target, which aimed to offer a more upscale and enjoyable shopping experience than other discount retailers of the era.
The first Target store opened in 1962 in Roseville, Minnesota, and the concept quickly gained traction with shoppers who appreciated its clean, well-organized layout, wide aisles, and attractive merchandise displays. Throughout the 1960s and 1970s, Target expanded rapidly, opening new stores across the Midwest and eventually nationwide. By the 1990s, Target had established itself as a major player in the discount retail industry, known for its trendy, affordable merchandise and strong brand identity.
In 2000, the Dayton Hudson Corporation changed its name to the Target Corporation, reflecting the growing importance of the Target brand to the company‘s overall business. Today, Target operates more than 1,800 stores across the United States, generating annual revenue of over $78 billion (as of fiscal year 2020). The company is publicly traded on the New York Stock Exchange under the ticker symbol TGT and is a component of the S&P 500 index.
Walmart‘s Journey to Global Dominance
Walmart‘s history begins in 1962, the same year that Target opened its first store. Founder Sam Walton, a former J.C. Penney employee, opened the first Walmart Discount City store in Rogers, Arkansas, with the goal of offering the lowest prices possible to customers by keeping costs low and leveraging economies of scale. Walton‘s strategy proved successful, and Walmart grew rapidly throughout the 1960s and 1970s, expanding first across the southern United States and then nationwide.
In the 1980s and 1990s, Walmart began to expand internationally, opening stores in Mexico, Canada, and the United Kingdom, among other countries. The company also diversified its store formats, introducing Walmart Supercenters (which include full grocery departments), Walmart Neighborhood Markets (smaller grocery stores), and Sam‘s Club (a membership-based warehouse club).
Today, Walmart is the world‘s largest company by revenue, generating over $548 billion in annual sales (as of fiscal year 2021). The company operates more than 11,500 stores under 56 different banners in 27 countries, employing over 2.3 million associates worldwide. In the United States alone, there are more than 5,000 Walmart stores, including Supercenters, Discount Stores, and Neighborhood Markets.
Target and Walmart: Ownership and Corporate Structure
One of the most common misconceptions about Target and Walmart is that they are somehow related or that one company owns the other. In reality, Target and Walmart are completely separate companies with distinct ownership structures and management teams.
Target is a publicly-traded company owned by its shareholders, with no single entity or individual holding a controlling stake. As of March 2023, the company‘s largest institutional shareholders include The Vanguard Group (9.43%), BlackRock Inc. (8.52%), and State Street Corporation (4.82%). Target‘s executive leadership team is headed by CEO Brian Cornell, who has held the position since 2014.
Walmart, like Target, is a publicly-traded company owned by its shareholders. However, the Walton family, descendants of founder Sam Walton, hold a significant stake in the company through both direct ownership and their control of two large trusts. As of March 2023, the Walton family owned approximately 50% of Walmart‘s outstanding shares. Walmart‘s executive leadership team is headed by CEO Doug McMillon, who has held the position since 2014.
Similarities and Differences: Target vs. Walmart
While Target and Walmart are separate companies, they do share some notable similarities. Both retailers offer a wide range of products, including groceries, clothing, electronics, home goods, and more, and both prioritize affordability and convenience for their customers. They also have a significant brick-and-mortar presence, with stores located in communities across the United States.
However, there are also some key differences between the two retailers. Target has cultivated a more upscale and fashion-forward image, with a strong emphasis on design partnerships, private-label brands, and a more curated product assortment. The company‘s stores are known for their bright, clean, and visually appealing layouts, and they often feature amenities like Starbucks cafes and CVS pharmacies.
Walmart, on the other hand, has traditionally focused on offering the lowest prices possible, leveraging its vast scale and efficient supply chain to keep costs down. The company‘s stores are typically larger than Target‘s, with a more utilitarian design and a broader product assortment that includes a full grocery department. Walmart has also invested heavily in its e-commerce capabilities in recent years, aiming to compete more effectively with online retailers like Amazon.
Another key difference between Target and Walmart is their customer demographics. While both retailers attract a wide range of shoppers, Target tends to appeal more to younger, urban, and slightly more affluent consumers, while Walmart‘s core customer base skews older, more rural, and more budget-conscious. This is reflected in the companies‘ store locations, with Target often found in higher-income areas and Walmart more prevalent in small towns and rural communities.
Competitive Dynamics and Industry Trends
As two of the largest and most influential retailers in the United States, Target and Walmart are constantly competing for market share, customer loyalty, and top industry talent. This competition has driven both companies to innovate and adapt to changing consumer preferences and industry trends.
One of the most significant trends shaping the retail industry in recent years has been the rise of e-commerce. Online shopping has grown rapidly over the past two decades, with companies like Amazon capturing an increasing share of consumer spending. In response, both Target and Walmart have invested heavily in their digital capabilities, launching user-friendly websites and mobile apps, offering home delivery and in-store pickup options, and expanding their online product assortments.
Another key trend has been the growing importance of omnichannel retailing, which involves providing a seamless and consistent customer experience across all channels, including brick-and-mortar stores, websites, mobile apps, and social media. Both Target and Walmart have embraced this trend, leveraging their extensive store networks to offer services like same-day delivery, drive-up pickup, and in-store returns for online purchases.
The COVID-19 pandemic has further accelerated these trends, forcing retailers to adapt quickly to changing consumer behaviors and safety concerns. Both Target and Walmart have implemented extensive safety measures in their stores, such as mandatory face coverings, enhanced cleaning protocols, and social distancing guidelines. They have also expanded their e-commerce and omnichannel offerings to meet the surge in demand for online shopping and contactless pickup and delivery options.
Despite these challenges, both Target and Walmart have performed well in recent years. In fiscal year 2020, Target‘s revenue grew by 19.8% to $92.4 billion, driven by strong growth in both its stores and digital channels. Walmart‘s revenue grew by 6.7% to $559.2 billion in fiscal year 2021, with e-commerce sales increasing by 79% year-over-year.
Walmart‘s Global Footprint and Acquisitions
While Target has focused primarily on the U.S. market, Walmart has pursued a more aggressive international expansion strategy over the past few decades. The company first entered the international market in 1991 with the opening of a Sam‘s Club in Mexico City, and it has since expanded to 27 countries across North America, South America, Europe, Africa, and Asia.
Some of Walmart‘s key international markets include:
- Mexico: Walmart is the largest private employer in Mexico, with over 2,400 stores operating under the Walmart, Sam‘s Club, Bodega Aurrera, and Superama banners.
- United Kingdom: Walmart owned the British supermarket chain Asda from 1999 to 2021, when it sold a majority stake to the Issa brothers and TDR Capital. Walmart retains an equity investment in Asda and a seat on its board.
- China: Walmart has been operating in China since 1996 and currently has over 400 stores across the country, including Supercenters, Sam‘s Clubs, and Neighborhood Markets.
- India: In 2018, Walmart acquired a 77% stake in Flipkart, India‘s largest e-commerce platform, for $16 billion. The move was seen as a major bet on India‘s growing digital economy and a challenge to Amazon‘s dominance in the market.
In addition to its international operations, Walmart has also made several notable acquisitions in recent years to strengthen its e-commerce capabilities and expand into new product categories. Some of these acquisitions include:
- Jet.com: In 2016, Walmart acquired the e-commerce startup Jet.com for $3.3 billion, gaining access to its innovative pricing technology and urban millennial customer base.
- Bonobos: Walmart acquired the men‘s clothing retailer Bonobos for $310 million in 2017, expanding its presence in the fast-growing online fashion market.
- Moosejaw: In 2017, Walmart acquired the outdoor retailer Moosejaw for $51 million, strengthening its position in the outdoor recreation and gear market.
These acquisitions reflect Walmart‘s ongoing efforts to adapt to the changing retail landscape and compete more effectively with online giants like Amazon.
The Future of Target and Walmart
Looking ahead, both Target and Walmart face significant opportunities and challenges as they navigate the rapidly evolving retail industry. E-commerce, changing consumer preferences, and the ongoing impact of the COVID-19 pandemic will continue to shape their strategies and priorities in the coming years.
For Target, key areas of focus include:
- Expanding its private-label brands and exclusive partnerships to differentiate its product assortment and drive customer loyalty.
- Investing in store remodels and new small-format stores to enhance the in-store experience and reach new urban markets.
- Continuing to grow its e-commerce business and omnichannel capabilities, with a focus on same-day delivery and pickup options.
- Advancing its sustainability and social responsibility initiatives, such as its Target Forward strategy, which aims to drive positive change across its business and communities.
For Walmart, key priorities include:
- Strengthening its e-commerce platform and logistics network to compete more effectively with Amazon and other online retailers.
- Expanding its presence in high-growth international markets, such as India and China, through strategic partnerships and acquisitions.
- Investing in new technologies, such as artificial intelligence and robotics, to streamline operations and improve the customer experience.
- Enhancing its grocery business, which accounts for more than half of its U.S. sales, through initiatives like online grocery pickup and delivery, and the expansion of its private-label food brands.
As these two retail giants continue to evolve and compete, consumers can expect to see ongoing innovation, improved experiences, and a continued focus on value, convenience, and customer service.
Conclusion
In conclusion, Target and Walmart are two of the most successful and influential retailers in the United States, with a significant impact on the communities they serve and the broader retail industry. While they share some similarities in their product offerings and focus on value, they are separate companies with distinct histories, strategies, and ownership structures.
Target has built a strong brand identity around style, design, and a more upscale shopping experience, while Walmart has leveraged its vast scale and efficiency to offer the lowest prices possible to its customers. Both companies have adapted to the rise of e-commerce and changing consumer preferences, investing in omnichannel capabilities and new technologies to stay competitive.
As the retail industry continues to evolve, Target and Walmart will undoubtedly face new challenges and opportunities. However, their strong market positions, loyal customer bases, and proven ability to innovate suggest that they will remain key players in the retail landscape for years to come. Whether shopping in-store or online, consumers can expect these two retail giants to continue shaping the future of the industry and setting the standard for value, convenience, and customer service.
