Wal-Mart Crushing Target

By Kevin Spak,  Newser Staff
Posted Mar 14, 2009 11:18 AM CDT
In this Dec. 6, 2007 file photo, a customer checks out at a Target store in Lombard, Ill..   (AP Photo/M. Spencer Green, file)
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(Newser) – In theory, Target should be thriving in the recession because it's a discount retailer. In reality, it's in a funk, even as rival Wal-Mart flourishes, reports Time. The difference? Target is viewed as a place to buy nice clothes at nicer prices—and right now, nice clothes seem like a luxury. Target’s profits fell a whopping 22.3% last year, while Wal-Mart has seen 22 straight months of growth.

The main problem is that Target devotes about 40% of its shelves to home and apparel, and less than 20% for perishables such as food and cosmetics. Wal-Mart devotes 45% to consumables. “Wal-Mart sells what you need to have,” said one retail consultant, “as opposed to what you want to have.” Target’s also dealing with a huge albatross: a credit division that saw profits fall 80.5% last year.