Target Vs. Walmart – What’s The Difference?

Target can trace its origins back to the Goodfellow Dry Goods company in June 1902, the first Target store was opened in 1950, and the first Walmart opened in 1960. The two companies are the largest retail stores in North America.

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Comparing the two stores is very interesting; Target positions itself as offering higher quality items at the best price, and Walmart aims to be the lowest-priced supplier for all its merchandise. While Walmart is five times bigger than Target, Target is significantly more profitable.

The two organizations compete very actively; however, they focus on different markets, and the typical customer demographic is quite different. They produce a gross revenue larger than some small countries between the two stores.

Table of Contents

• Overall Comparison Between Target Vs. Walmart
• In-Depth Comparison
  • Store Location
  • Quality Of Merchandise
  • Groceries
  • Clothes
  • Prices
  • Store Layout
  • Service Levels
  • Customer Return Policy
  • Shopping Carts
  • Restaurants And Food Courts
  • Till Lanes And Checkout Speed
  • Customer Demographics
    • Gender Profile
    • Racial Profile
    • Income Group Profile
    • Age Profile
  • Financial Comparison
• So, Which Is Best: Target Or Walmart?

Overall Comparison Between Target Vs. Walmart

Walmart and Target are low-cost retail stores with the two highest revenues in North America.

Walmart Stores Inc is the world’s largest retail company. It focuses on megastores and is very efficient in how much inventory it carries and how quickly it can turn it over.

While only 20% of Walmart’s size, Target is Walmart’s primary competitor in North America.

Target uses a low pricing strategy similar to Walmart; however, while more focused on its e-commerce platform, it also offers a better in-store experience and an inventory with a higher perceived value.

In-Depth Comparison

Target’s tagline is “Expect More. Pay Less,” and Walmart’s tagline is “Save Money. Live Better”. These two statements highlight the different positioning of each company.

Target is perceived as stocking trendy, fashionable, high-quality merchandise at discounted prices, slightly more expensive than Walmart.

Target’s customer base is medium to higher-income group families with a median household annual income of $64K.

Walmart makes price its primary focus and the one metric to which all the others are subordinate. It has the honor of being the most recognized brand globally and the largest public company in terms of sales.

The reality is that the cost for identical trolleys is very similar; however, Walmart’s drive to reduce prices suffers from quality control issues.

The following section looks at how the stores compare and the difference in shopping experiences based on the following comparisons.

Store Location

It is said that the three most important things a business must consider are location, location, and location.

While both Target and Walmart have an impressive presence in North America, Walmart is the clear winner in the category.

Target has 1,926 stores in North America, and Walmart has 10,500 stores.

While 75% of U.S. residents live within a 10-mile radius of a Target store or Super Target, 90% of U.S. residents live within 10 miles of a Walmart store.

Target has 14 million distinct store visits each week.

With 10,500 stores, Walmart’s store traffic is mind-blowing, with 270 million distinct store visits each week. That equates to 14 billion unique store visits annually. This figure does not include online purchases through its e-commerce facilities.

Quality Of Merchandise

It is in the area of quality where Target is positioned ahead of Walmart.

While Walmart’s stated driver is that it will use its vast economies of scale to reduce prices, however quality suffers. Walmart’s effort to continually win the price wars has created the impression that its merchandise is significantly lower quality than Target.

Target positions its merchandise as having superior quality and an affordable price. Its advertising positions itself as follows “Target offers customers a variety of mid-to high-quality products at affordable prices.”

Companies that actively compare the two organizations are very blunt about Walmart selling a product based on price and that it is neither well-made nor durable.

The result is that customers generally perceive Walmart as the best place to purchase basic items where quality is not a major issue and move over to Target to buy aspirational items for which quality matters more.

On the other hand, Target offers prices that compare to Walmart; however, the goods are colorful, on point in terms of fashion, and will last.

Groceries

The hands-down winner in the price of groceries is Walmart.

Walmart also has the greatest range of comparable food items where it is possible to be overwhelmed with choices. An example is that they have 34 different options of kettle chips.

Walmart has a wider selection of foodstuffs.

Despite Walmart’s reputation for lower grocery prices, the difference in dollar value per cart is not large.

Clothes

Target has positioned itself as a young and vibrant company with a youth full appeal.

The clothing merchandise is young and vibrant, with higher perceived quality without substantial price differentials.

Walmart’s ability to reduce costs comes with moral questions about the sourcing of its products. Walmart saves significant cash by outsourcing clothing manufactured overseas, often using marginalized communities with poor working conditions and quality.

The media has taken them to task and has raised awareness of the cost of Walmart’s low prices against the exploitation of third-world staff. The media have also slammed them for keeping costs down by paying unfair wages.

Target and other competitors have survived media scrutiny, and its manufacturing and distribution have passed muster.

As a result, Target has been able to position its offering in direct contrast to this, and it is an important consideration for Target customers.

Prices

Price comparisons are regularly made between Target and Walmart.

The comparison below is based on 2021 prices, and values are from sticker prices rather than the amount paid.

Category	Target	Walmart	Savings
Groceries	$44.61	$44.28	0.70%
Health and Beauty	$36.64	$36.10	1.50%
Electronics	$289.95	$295.82	2.00%
Pet Care	$53.55	$53.18	0.70%
Baby	$70.26	$70.16	0.10%
Total Cart Price	$495.01	$499.54	0.90%

These comparisons are somewhat irrelevant as both companies operate a low-price guarantee scheme where rebates will be applied when proof of a lower price at the other store is shown.

For everyday shopping of food, health and beauty, pet care, and baby care products, Walmart provides the lowest base prices, and for these items, Walmart is the cheaper option, albeit by a very small margin.

Both Walmart and Target will accept the manufacturer’s discount coupons in addition to any in-store deal running.

Both the companies allow the customer to access online coupon codes to save additional money.

Brand name items are easy to compare, and Walmart deliberately prices its merchandise two to four cents lower than Target. It is illusionary because at the till, the total cost of similar carts is almost identical.

It is more difficult to compare each company’s house brands and the clothing sections.

In this area, Walmart is cheaper, but the compromise is made in quality, where Target is the clear winner.

Store Layout

The clear winner with store layout is Target, so much so that the new store format being rolled out by Walmart in 2022 is very similar to Target.

In 2015 Target converted the old fluorescent light to energy-efficient LED units. The change impacted expenses, but it also cleaned up the lighting, making the Target stores brighter and inviting.

How merchandise is laid out in Target stores is much more pleasing to the eye than in Walmart. The goods are arranged in novel and interesting displays.

Target has wider aisles and clearer signage, and the positioning in the store is intended to be a trendier, more fun design.

Target stores are reputed to be calmer and more orderly than Walmart.

Walmart stores appear less organized than Target, and customers are more likely to see mixed-up items, messy displays, and random objects lying around at Walmart than at Target.

To combat shoplifting, Walmart locks up items that are vulnerable to theft. While this is understandable for high-value tech items, Walmart even locks up certain toiletries and other regular goods, adding inconvenience and a certain resistance to the shopping experience.

Target merchandise is marked, and there are multiple comparisons provided.

Both stores offer affordable pricing and self-checkout options.

Service Levels

Walmart provides better customer service, and the staff is renowned for being humorists and willing to help.

Walmart scores higher than Target on overall customer satisfaction and whether or not customers would recommend Walmart to someone else.

The impression of the Target staff is somewhat different, and customer courtesy is not high up on the value pole.

Walmart’s “greeters” are often dressed in outlandish outfits and regularly look to make the customer smile. However, these are small things that can have a lasting impression as it relates to customer loyalty.

Customer Return Policy

The return policies of both organizations are very generous and allow for a 90-day no question asked return of goods.

Both stores allow for returns without customer receipts and, in these instances, will provide a store credit to the customer.

Shopping Carts

The Target shopping carts have been switched to plastic, and they have newer running gear, making them very easy to push and turn in the store.

Many Target shopping carts can carry more than one child, which is a boon for the harassed mummy trying to get everything done.

Target has Starbucks franchises in the store; they have also upgraded the shopping cart by adding cup holders.

Target also has “Caroline’s Carts” designed specifically for children with disabilities.

Restaurants And Food Courts

Both organizations’ stores offer a variety of food courts.

Target licenses the Starbucks brand name to sell drinks and snacks to Target shoppers.

These are present in most Target Starbucks locations, and the shopping carts have convenient cup holders installed, which makes drinking a cup of your favorite brew while pushing the shopping cart much easier.

Target stores offer the following eateries.

1. Starbucks (although the brand is rented, Target runs the actual outlets).
2. Salad and soup chain Freshii.
3. Pizza Hut.
4. Minnesota-based D’Amico & Sons Italian Kitchen.

Walmart leases space to

1. Dominoes.
2. La Madeleine French Bakery & Cafe.
3. Taco Bell.
4. Saladworks.
5. Wow Bao.
6. Nathan’s Famous.
7. Frutta Bowls.
8. Hissho Sushi & Wine Bar.
9. Shawarma Press.
10. Wendy’s
11. Charleys Philly Steaks.
12. Surfin’ Chicken.

Till Lanes And Checkout Speed

While the till lanes in Target stores move faster, the Walmart experience is more pleasant and personable.

Walmart staff must interact with the customers, which slows the checkout speed down; however, customers don’t seem to react negatively to this and, arguably, seem to enjoy the process.

Customer Demographics

The customer bases of each company are shown in the attached table.

Gender Profile

Shopper by sex	Target	Walmart	US Overall
Female	64.0%	72.0%	49.2%
Male	36.0%	28.0%	50.8%

Racial Profile

Shoppers by Race	Target	Walmart	US Overall
White	65.0%	73.8%	60.1%
Black	14.5%	10.6%	13.4%
Hispanic	20.0%	10.9%	18.5%
Other	0.50%	4.80%	8.00%

Income Group Profile

Shoppers by Income	Target	Walmart
Average Annual Income	$65,000	$53,000
% of customers earning more than $100,000	25.0%	17.40%
% of customers earning more than $50,000	60.0%	46.00%

Age Profile

Shoppers by age	Target	Walmart	US Overall
18 – 44 years old	60.0%	38.0%	60.1%
45 – 64 years old	14.5%	41.6%	13.4%
65 and older	12.0%	20.4%	18.5%

Financial Comparison

The statistical comparison between Target and Walmart is interesting.

Item	Target	Walmart
Turnover	$106 billion	$573 billion
Profit	$6.946 billion	$13.673 billion
Profit as Percentage of turnover	6.55%	2.38%
Number Of Staff	368,000	2,300,000
Profit per staff member	$18,875	$5,945
Number of stores	1,926	10,500
Turnover per store	$55,036,345	$54,571,429
Profit per store	$3,606,438	$1,302,190
2021/2022 growth in Turnover	37.48%	4.42%
2021/2022 growth in Profit	59.02%	1.21%
Share price (1st May 2022)	$236.39	$152.99
Earnings per share	$13.56	$4.75
Price Earnings Ratio	17.4	32.2

While both companies are profitable, Target is the one that delivers the best return for its investors.

With a price-earnings ratio just under half that of Walmart, the target shares offer real value.

With Target’s turnover growth of 37.48% compared to Walmart’s 4.42% and profit growth of 59.92% (Target) compared to 4.42% (Walmart), the smart money is buying Target shares.

So, Which Is Best: Target Or Walmart?

Whichever metric is used, both Target and Walmart are very impressive organizations. Between them, the combined turnover is more than $600 billion per annum, and they employ more than 2,7 million people, which is more than the entire population of Jamaica.

Target’s merchandise is generally of a higher quality than Walmart’s, and its products have a reputation as long-lasting. Target’s stores are laid out more open and organized, while Walmart aims to beat its competition on price for each product.