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Walmart, Target now more alike

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CHICAGO — Walmart and Target Corp. are becoming increasingly similar as the former improves its merchandising prowess and the latter sharpens its pricing, a new report contends.

Walmart and Target Corp. are becoming increasingly similar as the former improves its merchandising prowess and the latter sharpens its pricing, a new report contends.

“Of course, Target and Walmart have each replicated successful aspects of the other for many years, allowing both companies to gain share from weaker competitors,” the report from William Blair & Co. says. “So in one sense this highlights the extent to which each is shoring up its own weaknesses.”

This is the fifth annual study in which the equity research firm compares the two discount retailers. It found that the percentage of general merchandise items that are identical at the two retailers’ stores have increased from 13% in 2005 to 22% in 2009.

The overlap is considerably higher when food and other consumables are taken into account, and the report predicts that it will increase in the next few years.

William Blair rates both companies as “outperform,” saying Target will gain from improving discretionary spending and fewer credit card write-offs, and Walmart from increased inflation and its cost-reduction efforts.


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