Credit Card Comparison Blog

Winning the Battle Between Target and Walmart

Winning the Battle Between Target and Walmart

The holiday shopping season is in full swing. Consumers are finding themselves shopping instead of having a picnic in the park. The cold weather seems to be forcing people in doors. This can be a good and a bad thing. On the one hand, consumer spending is very good news to retailers. On the other hand, consumers, in general, don’t have as much disposable income as they did in the past.

Target Corporation has had to make drastic changes in recent weeks. The superstore giant reported a 24 percent decrease in its third quarter profit. Target’s profits have taken a major hit since the onset of the financial crisis. Because of this, the corporation is promising to slash prices.

Recently, Target announced that it will “aggressively cut prices to give consumers bargains during the holiday season.” It also announced that sales in well-established stores have already been dwindling in November. If this persists, Target may have to face lower-than-expected fourth quarter profits.

Target’s Chief Executive Gregg Steinhafel said, “The increasing financial challenges and economic uncertainties facing American households continued to pressure our performance during the third quarter.” Steinhafel went on to say that the company wrote off more in the company’s credit card business. Target Credit Cards’ profitability fell 83 percent. In addition, Target put $104 million into a reserve fund to cover the costs of future credit write-offs.

On the other hand, Wal-Mart said that its third quarter profit increased by 10 percent. Target is being forced to become more like Wal-Mart in every sense of the word. Target is planning on offering lower prices, especially with the holiday shopping season in full swing.
Steinhafel continued, “We have taken a very aggressive point of view this year in terms of our promotional pricing, so we expect to be price leaders on selected items in our circular. This is not unlike what we’ve done in the past. But, given the current environment and recognizing how challenging it is, we will be even sharper than we have in prior years.”

Target may be your first stop for all of your holiday shopping this season. Prices will be drastically reduced, which is a great thing for you. Don’t forget to use your favorite reward credit card to double your savings.