Name: Why Target Is Losing Against Competitors Walmart And Costco
Uploaded: 2025-11-28T14:19:16.000Z
Duration: 11 min 16 s
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Target, one of America's biggest and most beloved retailers.

Known for its large and airy stores, a wide selection of products at affordable prices and some of the most exciting partnerships in retail.

Its loyalty program boasts 100 million members.

The retailer sold a total of $106.6 billion of goods in 2024.

That's really something that Target has built.

This idea of a joyful, fun shopping experience that's colorful and will introduce you to items you didn't even know that you wanted or needed Yet.

As of late, the discount department store has lost market share.

And while its customers are spending about the same per quarter, Walmart and Costco's customers are spending even more.

Between April 2024 and April 2025, Target lost nearly half of its share price.

It's hard to get on top as a favorite retailer, but

it's even harder to stay on top, especially in a digital age where people customers attention spans are shorter.

Target was once the poster child for retail.

It's not a company that's completely lost its way, but it is a company that's lost its mojo.

experts say a lot of Target's issues are self inflicted, like understaffing and excess inventory and what some have called an identity crisis.

In general, I think there's confusion about who Target is and what it stands for.

At this point, the company needs to get back to some of that original feeling that it gave shoppers and but that can be a hard thing to do.

Target, like most retailers, is caught in the Trump administration's turmoil around tariffs.

While on a 90 day pause, the volatility is damaging consumer confidence.

Roughly half of Target's merchandise is sourced internationally.

As of April 30, the Trump administration has imposed 10% universal tariffs on most countries except China, which is set at 145%.

Over the last few years, we've gone from over 60% of our imports coming from China to 30 and we're on a path to get it down to 25.

So we've diversified our supply chain to give us more optionality and I think that'll serve us well as we go forward.

We're going to try to make sure we can do everything we can to protect pricing.

But if there's a 25% tariff, those prices will go up.

The news about tariffs comes after the retailer reported yet another year of flat revenue for foot Traffic declined for 11 straight weeks between January 27 and April 13, 2025.

That period coincided with a 40 day boycott over the company's decision to roll back some of its diversity, equity and inclusion initiatives.

Competitor Costco, which stuck with its DEI goals, saw sales grow nearly 9% in March 2025 from the same month a year prior to.

Customers really don't like that confused positioning and it's kind of trying to take a middle of the road position.

The problem with being in the middle of the road is you end up getting knocked down from both sides.

While shoppers aren't turning away from Target completely, Walmart and Costco's customers are spending more than they did three years ago.

Target sells more discretionary products than competitors.

It helps that Walmart is the nation's largest grocer by revenue.

About 60% of its total sales are non discretionary.

When you're a destination for groceries, which is like a weekly, sometimes multi week, multi day in a week visit, you have more opportunity to get the customer to buy something else while they're in the store.

Target has been seen as being, you know, not quite so good value for money over recent years.

And people have said, look, let's give Walmart a try, especially for grocery and some essential stuff.

And again, once they've tried it, they're not going back.

Meanwhile, Walmart has been taking a few pages out of Target's playbook, updating its apparel, refining private label brands and adding premium products.

It has also attracted a wealthier consumer.

Several experts say Target has also struggled to adapt to its new channels like e commerce and curbside pickup.

Target has almost become a victim of its own success because it's grown a lot, especially online.

A lot of the basics in many stores are being neglected.

There are empty shelves because products not being bought out from the stock room.

There are longer lines at the registers because Target doesn't have enough staff to open those registers.

And this has really deteriorated the store experience.

Target's problems are much bigger and more complicated.

It's dealing with inflation as people are buying less wants and more needs.

It's dealing with a complex environment where people are going to competitors like Walmart who are investing heavily in their brand.

And so it's hard to know exactly how much is coming from DEI and the backlash related to it.

But more than likely it's a mix of all of the above.

Target's financials soared during the pandemic.

The retailer remained open and its core customer a middle to High income shopper was on a spending spree.

With a generous stimulus check, Target stock shot up to an all time high in November 2021.

Folks, we've got some news just out from Target.

It's releasing its holiday sales numbers.

These are the sales for November and December for the big box retailer and they are pretty unbelievable numbers.

Their comp sales are up 17.2% for those two months.

You can imagine that giant Gain put a lot of pressure on the company to keep that growth going.

And it became a lot more difficult as its core customer had a lot more expenses to juggle.

The juggling started as inflation shot up to record highs.

Retailers got stuck with too much of the wrong inventory.

Discounting became Target's only solution, causing its gross margin and profitability to drop significantly.

Target has offered a collection celebrating Pride Month for a decade.

But during its second quarter 2023 call, CEO Brian Cornell said that backlash by conservative customers had hurt sales.

The company removed some of the collection from stores and slimmed down its offerings online by 2024.

But Target's issues haven't stopped at politics.

After reporting its biggest earnings miss in two years, in its third quarter 2024, Target's share price plunged 21%.

Walmart had beaten earnings the day before.

During the call, Cornell laid some of the blame on increased costs associated with the October port strikes that stretched from New England to Texas.

But the strikes only lasted a few days, and

data revealed that the company misjudged a softening in consumer spending and over ordered Target has struggled to have the right things at the right times.

For example, with inflation, it's seen a pivot to necessities like paper towels and food food.

And it had too many discretionary items like home goods that people weren't buying at the same levels.

And then again, it faced this inventory challenge.

When the port strike was threatened, the company faced a lot of additional costs because it rushed to have inventory there.

Target has partnered with famous designers for over 25 years.

Italian fashion house Missoni or furniture and home goods designer Magnolia are just some examples.

It also hasn't reacted as quickly to trends and newness, which has proven easier for e commerce retailers Amazon and TikTok Shop.

We want to make sure we delight them with great new items, but

also the value they're looking for, that affordability every time they shop.

So we'll continue to make sure we lean in and do everything we can to control prices, provide that value, and

continue to delight them with newness along the way.

Retail theft and shrink continue to be an issue for Target.

In the first half of 2023, the company said it lost nearly half a billion dollars more than in the year prior, causing it to lock up some of its products.

They'll say, okay, I'll try Amazon for that, get it delivered to my door.

The problem is, once they've tried it once, they tend not to go back.

Some investors and analysts have blamed Target leadership on some of its operational challenges.

CEO Brian Cornell is slated to retire at the end of 2025.

However, no succession plan has been announced.

There seems to be a sort of timidity in the boardroom around coming out with definitive statements, definitive views, even definitive strategies for Target.

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Why Target Is Losing Against Competitors Walmart And Costco

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