Target loses its way while Walmart thrives

In 1962, Target was launched in the United States by Douglas Dayton, aiming to offer a unique blend of quality fashion at discount prices. The co-founders envisioned a brand that would appeal to consumers looking for affordable yet stylish options, positioning themselves distinctively in the retail market. Over the following decades, Target gained a reputation as a chic alternative to traditional discount stores, leading to the affectionate nickname 'Tar-jay' among customers, signifying its stylish yet affordable nature. However, as the retail landscape evolved, Target began to venture into unfamiliar territories, such as the grocery business, which it had no historical basis in. During the early 2000s, the company's attempts to shift its focus towards grocery items—characterized by low margins and a different customer expectation than its established fashion offerings—mark the beginning of its downfall. Unlike Walmart, which successfully expanded its grocery sector while staying true to its general merchandise roots, Target struggled to maintain its brand identity. Walmart, founded in the same year as Target, strategically built its grocery operations into a significant revenue source. By 2025, nearly 60% of Walmart's projected revenue is expected to come from its grocery sales, underscoring an effective business model that Target has failed to replicate. Moreover, Walmart has been able to keep its corporate culture and management loyal to the founding principles set by Sam Walton, who instilled a strong identity within the company. In contrast, Target's commitment to its original brand message has waned over the years, resulting in lost market share and customer trust. The struggles faced by Target can also be attributed to a lack of familial ties to its founding. Unlike Walmart, which is still significantly influenced by the Walton family, Target shares are primarily held by institutional investors. This distance from the founding principles has led to declining brand loyalty and confusion among customers regarding what Target represents today. The case of Target serves as a cautionary tale for brands that neglect their founding values and lose their sense of identity in a rapidly changing marketplace.