By now you’ve all heard about the two biggest Big Box discounters in the country complaining that they have too much merchandise and are going on a crash diet to get rid of the stuff with serious markdowns and nasty sales.
And while they are no doubt telling the truth, visits to a Walmart and a Target store in the Atlanta metro area seem to show that things are not quite as advertised.
And full disclosure: this is based on one visit to one store at each of the chains. We can’t speak for what was happening at these locations on other days or other stores around the country. But it does make you wonder, right?
The recently reset Target store just off Interstate 85 in Atlanta and a seven-year-old heavily trafficked Walmart Supercenter in nearby Decatur showed vastly different versions of the inventory overload situation both chains have talked about…and taken their hits on from Wall Street.
Here’s a subjective look at what we found:
Walmart
It’s always a challenge to understand the in-store inventory levels at just about any Walmart more than 25 miles from corporate headquarters in Bentonville, AR. You don’t get to be the biggest Box on the block by being shy about putting out the merchandise. So this store was mostly overflowing with goods, particularly in the casual apparel area, where both chains have said the problem is most acute. But we saw few “clearance” or “everything-must-go” signs or banners anywhere even though the store had its usual Walmart-speak “Everyday Low Price” and ubiquitous “Save Money. Live Better” slogans throughout.
But some of the areas overflowing with goods – and they were fewer than expected when compared to Walmart’s stack’em-and rack’em style of merchandising – stood in contrast to a fairly significant number of departments on the general merchandise side of the store where stock outages and long empty gondola runs were more obvious. This was particularly so in some non-apparel areas such as home textiles and housewares.
At the end of the store, this particular Walmart on this particular day pretty much looked like any Walmart on any day, post-pandemic or not. The housekeeping was appalling, some areas were claustrophobic with too much merchandise and others looked like they were set by packs of Hells Angels wannabes.
Yes, we tried to cut the store some slack with labor shortages and such, but there were plenty of blue aprons around trying to make some order out of the chaos. They were largely unsuccessful
Target
Less than five miles away another aging discount store, this time Target, had just finished up a remodeling, which was happening only a few years after its last refresh. This one was more substantial and included a new Ulta shop-in-shop and pretty much a full reset of departments according to some algorithm that the folks in Minneapolis probably burned through a few supercomputers to work up. We guess customers will get used to it, but no doubt some will still be wondering around months from now trying to find the cat toys.
So, a review of marked down merchandise levels and clearance racks at a store that’s just been reset may not be entirely fair but that said, you had to really search out overflowing areas. Again, what there was, was in casual apparel, both men’s and women’s, as well as kids. But there were stock outages too – a perennial Target symptom through good times and bad. We didn’t notice them being any more or less than usual.
The Verdict
One hates to draw massive conclusions from minimal research but given the caveats on this adventure it’s difficult to buy the theory that either of these giant discounters has quite the problem they say they do. Maybe they’ve solved it already or moved the merchandise off to third-tier and/or third-world homes. Or maybe it’s a smokescreen to deal with Wall Street: interestingly the share price of both stocks is back up from when they each announced the overages a few weeks ago (even if they are in fact off since the start of the year).
Could it also be the best retail head-fake we’ve seen in a long time to get shoppers back into stores and onto websites in baited anticipation of fabulous bargains? Not saying that’s what anybody’s doing…but we’ve seen such bad behavior from the retail community before.
We’re not quite sure what to make of all of this…except that we came out of both places with shopping bags.
WarrensReport 