Target online sales drop

[storewanderer]

This is not a surprise. Target's online efforts are clumsy and inefficient. Especially for low/no margin food, their process is a complete disaster. Target continues to not make the moves necessary to combat Wal Mart in a timely manner and has too many of the wrong sized stores in the wrong locations.
https://finance.yahoo.com/news/targets- ... 40951.html

Meanwhile Wal Mart had an absolutely fantastic quarter, running on all cylinders. That grocery business is rescuing Wal Mart quarter after quarter as they up prices more and more and more.

I am seeing some decreases in food pricing lately though. Including at Wal Mart.

[ClownLoach]

I'm not sure that this is meaningful. Target comp sales were flat. People are swapping back to shopping in person instead of online as the pandemic subsides. Considering how many $$ off Drive Up coupons were being sent out last year to incentivize customers to use the service it's no wonder that the digital sales are down. It's an even swap that would have delivered better margin of it wasn't for the shrink increases.

Walmart runs such miserably awful operations right now that I only shop them online for pickup now when I have a predetermined list of items that are the entire reason for shopping their store. More than half the time the most important items are actually out of stock due to wildly inaccurate counts. Combine that with 50+ aisles of lock up cages that nobody seems to be able to open for everything down to 99¢ band aids (in one of the 25 lowest crime communities in the USA) and it's just not even possible to shop there in person. They're forcing customers to online, and I suspect that just as many people shop elsewhere as move to their website.

[buckguy]

Much made about small changes in patterns of shopping at Target (online v. otherwise) and small changes in their profit margin. They did manage to cut inventory. Walmart is still not outperforming inflation.

[storewanderer]

Much made about small changes in patterns of shopping at Target (online v. otherwise) and small changes in their profit margin. They did manage to cut inventory. Walmart is still not outperforming inflation.

Not many retailers are outperforming inflation. But Wal Mart is much further ahead on that path than Target is.

[arizonaguy]

I'm not sure that this is meaningful. Target comp sales were flat. People are swapping back to shopping in person instead of online as the pandemic subsides. Considering how many $$ off Drive Up coupons were being sent out last year to incentivize customers to use the service it's no wonder that the digital sales are down. It's an even swap that would have delivered better margin of it wasn't for the shrink increases.

Walmart runs such miserably awful operations right now that I only shop them online for pickup now when I have a predetermined list of items that are the entire reason for shopping their store. More than half the time the most important items are actually out of stock due to wildly inaccurate counts. Combine that with 50+ aisles of lock up cages that nobody seems to be able to open for everything down to 99¢ band aids (in one of the 25 lowest crime communities in the USA) and it's just not even possible to shop there in person. They're forcing customers to online, and I suspect that just as many people shop elsewhere as move to their website.

Not to get too off topic but my closest Walmart store is a store that at one time was the #2 location in the entire city of Phoenix for police calls (not a really "safe" intersection) and other than some electronics and 1 - 2 aisles of beauty almost nothing is locked up. The store is also immaculately clean for the clientele.

I'm curious as to Walmart's rationale for what they lock up and what they don't.

[storewanderer]

Not to get too off topic but my closest Walmart store is a store that at one time was the #2 location in the entire city of Phoenix for police calls (not a really "safe" intersection) and other than some electronics and 1 - 2 aisles of beauty almost nothing is locked up. The store is also immaculately clean for the clientele.

I'm curious as to Walmart's rationale for what they lock up and what they don't.

Wal Mart's rationale for what they lock up and what they don't is often a decision of local store management and local loss prevention. So what happens is you get a store manager from some high theft store transferred into a low theft store that has nothing locked up and suddenly they freak out. Then, if they can get support from loss prevention they can get expenses approved to put in a ton of locking cases in a store with a certain shrink amount measurement.

So this is why these metro area Wal Marts have a ton of theft and then over time suddenly the Wal Marts in nicer suburbs start to be run like the bad neighborhood stores. This is a management failure. Store management and loss prevention going ary and doing things they should not be doing, but there is no oversight to stop them.

What is interesting is in some of the store remodels I've seen them do back in 2021-2022, they actually removed locking shelves from certain areas of some stores, then added them to other areas of said stores that previously did not have locking shelves.

Typically their shrink at the rural type stores is so low that they will not approve locking cases in those stores so everyone knows not to even try. There are tiny cases they can install that are so small they are like a medicine cabinet size for "problem items" that don't really need approval and aren't supposed to be used long term either.

[storewanderer]

Went into Reno Target tonight. Fairly busy. Clothes all over the floor. No cashiers, and only 4 self checkouts open (the bank of 8 or 10 or however many was closed). Employees screwing around as usual and seeing a lot of price increases all over Target to the tune of 20%. Still charging 3.39 for a dozen of eggs when Winco and Wal Mart are at 1.78, Smiths is down to 2.49). They also discontinued the pet food (this was a name brand; I can get it at Wal Mart, Petsmart, Smiths, Raleys, Safeway.....) and seltzer water (Target private label 1 L bottles - no big deal - CVS has private label seltzer from the same supplier). I went in for.

[ClownLoach]

Target is finishing up a massive new DC in Riverside on the fringes of March Air Force Base off I-215. The building is 1.86 million square feet and is a very impressive looking facility. The signs went up on it recently, it has enough signage that it looks like the largest Target of all time. It appears that this building will be in addition to their nearby Rialto facility which will be an "upstream DC" meaning it receives and processes larger shipments from the ports then breaks them down and sends to other "flow DC" facilities like the new Riverside DC where the product is sent to the stores. Nice to see that they're making serious investments in store level distribution while other companies let their DC networks dwindle to build more expensive e-commerce facilities that will ultimately be underused and the costs get passed on to every customer.

[veteran+]

Sounds like it is very close to where Fresh & Easy's "state of the art" DC was located.

[ClownLoach]

Not to get too off topic but my closest Walmart store is a store that at one time was the #2 location in the entire city of Phoenix for police calls (not a really "safe" intersection) and other than some electronics and 1 - 2 aisles of beauty almost nothing is locked up. The store is also immaculately clean for the clientele.

I'm curious as to Walmart's rationale for what they lock up and what they don't.

Wal Mart's rationale for what they lock up and what they don't is often a decision of local store management and local loss prevention. So what happens is you get a store manager from some high theft store transferred into a low theft store that has nothing locked up and suddenly they freak out. Then, if they can get support from loss prevention they can get expenses approved to put in a ton of locking cases in a store with a certain shrink amount measurement.

So this is why these metro area Wal Marts have a ton of theft and then over time suddenly the Wal Marts in nicer suburbs start to be run like the bad neighborhood stores. This is a management failure. Store management and loss prevention going ary and doing things they should not be doing, but there is no oversight to stop them.

What is interesting is in some of the store remodels I've seen them do back in 2021-2022, they actually removed locking shelves from certain areas of some stores, then added them to other areas of said stores that previously did not have locking shelves.

Typically their shrink at the rural type stores is so low that they will not approve locking cases in those stores so everyone knows not to even try. There are tiny cases they can install that are so small they are like a medicine cabinet size for "problem items" that don't really need approval and aren't supposed to be used long term either.

The operations I observe align with this. Walmart gives too much leeway to their Store Managers and local LP officials but doesn't supervise them well. They have a very strange model as previously discussed of a minimal District Manager team where a district can be 60-70 stores or more, so there is little consistency of direction given. A regional Manager could have a few dozen districts. Most stores get one formal District Manager visit a year and it's on a calendar months in advance; the Regional Managers have this calendar and show up to these announced visits "unannounced". Thus every visit is a dog and pony show where the whole district goes around and fixes stores so the DM never sees reality due to the risk that their boss could show up to the visit. Supposedly this model works well for Walmart because it forces them to at least get the stores cleaned up once or twice a YEAR as the visit is expected to be perfect. These DM and above visitors are as disconnected as possible - they're not even allowed to visit stores in "dangerous" areas like LA without the presence of security personnel and they're driven by a private car service. Says a lot about how much they care - the store isn't safe enough for the DM to shop in let alone a VP - but it's perfectly fine for the minimum wage employees.

The Store Managers are given authority to order for endcaps and pallet stack displays with very few corporate directed sets aside from the Prefilled endcap trays or pallet shippers. Basically they have a special system in which they place their orders and sales/margin/sales per Sq ft are measured and Walmart considers your ability to maximize this space as your ability to manage a store period. You can see how this can go very wrong with a Manager who doesn't understand their area. Obviously there is a high level of desirability for Managers from tough urban stores to apply for openings at suburban or rural stores that will not have situations like the daily restroom overdoses, full basket run outs, rampant return fraud, lockup in every aisle, and of course violence and anger everywhere. But before you know it they see a problem in their pretty little store in the country and they "know how to solve it" because they're like a hammer and every problem they see looks like a nail to them.

My personal favorite Walmart Manager autonomy example of all time was in the now closed Irvine, CA store where a Store Manager was transferred direct from Arkansas to oversee the location while their manager was covering somewhere else. They ordered pallet stacks of Velveeta Cheese and placed them at the front door along with turkey fryers, electric smokers and such. In spring in a renter majority city. Seriously there were endcaps of canned okra and black eyed peas. Chicken coop kits. This in a one of the most health oriented, plus most diverse and well integrated cities in America. It was the most stereotypical Southern US selection I've ever seen, almost like they were thumbing their nose at local culture and ignoring the new Whole Foods around the corner. Customers were absolutely baffled by what they were seeing and certainly weren't buying any of it. Obviously to the Arkansas Manager this was the perfect assortment for this store because it's all they knew... The regular Manager returned a few months later from his special assignment and I can only imagine what they decided to do with all this junk. Probably had to donate all of it.

I'm certain that on the West Coast Walmart LP has a "straight to lockup" program because of their intensive focus on shrink dollars first. So the LP department is incentivized to put the entire store behind glass doors. Maybe this is the way it needs to be due to the high volume of their stores? But I doubt there is ever any discussion at all of staffing to support the lock down measures, and the Walmart comical lack of employee trust means nobody can carry the keys. They assume every employee is probably a thief which leads to purchasing decisions like the aprons they bought a few years ago without any pockets. But as a customer it is nearly impossible now to go into Walmart with a typical grocery list and not find that at least two items are locked down, with no "call buttons" and no personnel who can help other than getting on the overhead PA. Another favorite observation is the moving of locked up categories to the makeshift cosmetics corrals but they don't give keys to the cashier there because then they would have to leave their station! So they stand there uselessly paging overhead with hilarious results... "Available Walmart Associate with keys to the Condom case. Available Walmart Associate with keys...." seriously I heard that overhead on the PA system. That's a customer who's never going to think of buying family planning products at Walmart. I can only imagine what else they'll lock up if they haven't already then page overhead every time a customer needs assistance. Laxatives? Hemorrhoid cream? Obviously if you need anything moderately embarrassing or even minimally expensive at Walmart you're probably better off buying online. Couple that with supposed Manager scorecards that rank shrink and online sales percentage and you've got a double incentive for the store to keep locking everything up. Cut shrink and increase online sales percentage. But how many people like the guy who was put on a pedestal at the corral for "keys to the condom case" are going to choose Walmart for that online order when they could go to Amazon who didn't publicly announce what they're buying in front of a couple thousand other shoppers?