Will Target be one of the few holiday winners?
Wake up and good morning. I was shopping the other day with my wife at our local Target store and wondering -- as I often do in Target -- what makes this company successful? It's not Wal-Mart, it's not Costco, it's not Sears, it's not Penney's. It does not have the greatest prices. I guess it's a good value with a slightly different mix of interesting stuff?
Readers: What makes Target tick after all these years? And is this sustainable magic in such an unfriendly economy to retailing?
Executives at Target Corp. this week tried to answer that same question in Monday's quarterly earnings (sales up a blip but earnings way down) conference call with analysts. (Read the transcript here.) Company CFO Doug Scovanner cited Florida, Arizona, Nevada and parts of California as Target's toughest markets these days. But he added some newcomers: "Certainly Georgia and the Carolinas, Tennessee, are much less healthy than they once were. And Michigan, (and) Ohio."
Here's how CEO Gregg Steinhafel described a tough quarter and the coming holiday shopping season:
"We are keenly focused on offering exceptional value, presenting a bold assortment of holiday gifts, most-wanted items and well-designed basic and fashion merchandise, and ensuring that our guests receive a superior experience in every store every day."
I don't know. Kind of vague to me. Couldn't most retailers say something like that? Steinhafel gave it another go in the conference call:
"Target's ability to deliver newness, great design, and quality is only half of the story. Our great prices on everyday basics and fashion items are the critical other half, and we are working to ensure consumers understand that the two are not mutually exclusive. Their synergy is what makes us Target and unlike any other retailer."
Okay. Synergy. Getting closer. The Target CEO then makes a Darwinian prediction that in this economy, not surprisingly, includes Target among those fittest -- and price-driven -- survivors of the coming retail bloodletting:
"With a strong emphasis on delivering exceptional value, we believe that Target, Wal-Mart and Costco will be the big winners this holiday season. In addition, we recognize that some of our other retail competitors may not emerge intact from the current economic turmoil. While we do not celebrate the misfortune of others in our industry, we believe that a smaller competitive set would be to our benefit when the economy improves."
Readers: Is this guy "on target" or is this retailer puffery? There are a good two dozen Target stores in the greater Tampa Bay area. Is Target a long-term player?
-- Robert Trigaux, Times Business Columnist