Fortune has an interesting article about a Target that opened up in Walmart country. The store is located about seven minutes from “Wal-Mart No. 1″, the first Wal-Mart ever built, and 20 minutes from Walmart’s headquarters in Bentonville, AR. At first, Target was concerned that the Walmart faithful wouldn’t shop at their new store — but they worried needlessly. Apparently, former CEO Lee Scott and current CEO Mike Duke are regulars.
From Fortune:
Former Wal-Mart CEO Lee Scott and his successor Mike Duke are both frequent visitors, according to Target store manager Chuck Simmons, who jokes that he has become so friendly with Wal-Mart’s district manager that “he’s like my second boss.”
Apparently, running a Target in Walmartville can be somewhat stressful. Why? Everyone has the CEO’s cellphone number.
“There are people who come in here who have my CEO’s cell phone number,” he says, alluding to the dozens of vendors who have set up camp in Northwest Arkansas. The last thing he wants, he says, is to get a call from Target chief Greg Steinhafel wondering why he is not doing things the Target way.
Well, yay.
Target thrives in Wal-Mart country [Fortune]
(Photo:Flickr Avatar)
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Sam Walton frequently visited K-Marts at the time. My mom was a checker at the local K-mart and met him. He liked to come in and check out the competition.
Just because they are the CEO at one company does not mean they can’t shop at another.
There’s also a good possibility the Wal-Mart exec knows full well the stuff his company makes can be crap and decides to shop at target instead.
@dragonfire81: You realize that his company doesn’t “make” anything and most of the stuff in Target is made at the same places where the stuff in Wal-Mart is made?
@anthonyhasp: He’s probably alluding to the rumors that WalMart has manufacturers purposely make cheaper “WalMart exclusive” versions of their higher quality products. It’s a toss up, really. I’ve bought some good quality stuff at WalMart, and I’ve bought stuff that turned out to be crap. Ultimately, though, it seems more of their products are the type to perpetuate and underscore Sam Vimes’ Boots Theory of Socio-Economic Injustice.
@RecordStoreToughGuy: That’s what I was alluding to.
@RecordStoreToughGuy: It’s not a rumor, it’s the truth. Check out the Dyson vacuums in Target then check them out in Sam’s Club or Walmart, they *look* the same but are made of cheaper plastic.
@wellfleet: Check out the Dyson vacuums in Target then check them out in Sam’s Club or Walmart, they *look* the same but are made of cheaper plastic.
Yea… I baught a Dyson on Amazon, and it was made from cheap plastic too.
$400 Piece of junk. Great Design, Poor Quality.
@Chase Teschendorf: Bad PR? I don’t see anyone up in arms about the Wal-Mart CEO shopping at Target, quite frankly I don’t anyone really cares. I know I don.t.
@wellfleet:
I’m pretty sure that’s not the case. a DC23 is a DC23 is a DC23.
maybe there’s different materials used in the different models- but the DC27 that sams offers now isn’t of a crappier build than the 23, as far as I’m aware. Just a different style.
@dragonfire81: Sorry to break this to you, but it could be easily argued that a CEO of Walmart they can’t shop (actually buy things) at another company. I think the title of this consumerist post is misleading — I don’t think the Walmart CEOs are actually shopping at Target to purchase things, but if they were, they are in technical violation of certain obligations they have to their company by virtue of their position as corporate officers.
CEOs of companies have a set of legal duties to the company: e.g., the duty of loyalty, the duty of fair dealing, and fiduciary duties that run to the company they work for.
In a shareholder derviative suit, one could claim that by patronizing a competitor, this violates the duties of an officer of a competing corporation. No one would do that because the damges to the corporation are so small. But someone COULD do that, because corporate CEOs have an obligation that runs to their companies and the shareholders of the company.
@stevejust: And if someone did do that, they are an idiot. Who the fuck cares?
@nakedscience: I guess you haven’t stopped to ask yourself how much an attorney bringing a shareholder derivitive suit can make in fees? That would answer your own question.
Here’s the suit: Let’s assume Wal Mart’s stock starts to slip next quarter. Someone files a suit claiming that the reason for the slip is the persistent rumors of Wal-Mart specific inferior products, the validity of which has been supported by articles like that appearing in Forbes magazine creating an impression among consumers that WalMart’s own CEOs won’t even shop at Wal-Mart, prefering Target instead.
There’s the lawsuit. It’s crap. But it could happen.
@stevejust: It could also be easily argued that he gains more in value for his own company by shopping the competition than he provides Walmart in his purchases.
But hey, this is America. When in doubt, just sue someone…
@stevejust: Hi, we want to offer you millions of dollars to come work at our company as an executive. The catch you can only shop at Walmart. I doubt that would have any takers. Target isn’t the only company Walmart could be seen as a direct competitor with.
Though there is some irony in forcing Walmart execs to live exclusively on the crappy products they sell.
@bohemian: I think you’re having trouble differentating between direct competitors.
Being CEO of Wal-Mart wouldn’t create any obligation not to shop at WholeFoods (even though Wal-Mart sells more organic produce than Whole Foods does), it wouldn’t prevent you from shopping at Barney’s or Saks or Neiman Marcus. It wouldn’t even prevent you from shopping at Macy’s.
But it could be argued you can’t be going to Target or K-Mart or Meier’s and not be seen as breaching your duty of loyalty and your fiduciary duties to the company, just based on the bad PR your doing so creates.
Think of the employee discount (and why employers offer discounts to employees in general as incentives.)
@dragonfire81: Ford CEO’s in detriots drive Bentley’s, Maserati’s, Mercedes, etc. I’m surprised they dont drive GT40′s or GT500′s. but then again, i’m not suprised they drive/own a Fusion or Expedition or something.
so yeah, I agree. just because you’re the CEO of Mcdonald’s or Wendy’s doesn’t mean you can’t eat Chinese Food or Italian food or Quizno’s or something.
-dave
@militarydave: Dude… there is only one CEO of a company. At Ford, it is Alan Mulally. He was driving a Lexus when he went to Ford from Boeing, but now as Ford CEO, he drives Fords.
Here’s a reference I found on google in 20 seconds for that:
[www.usatoday.com]
Why do people sit around and just make stuff up to post on the internets? I don’t understand.
Ar, not Ak for Arkansas.
@delicatedisarray: Yeah, I was pretty sure Wal-Mart’s HQ wasn’t in Alaska.
They are intelligent people checking out the competition. Glad to see they are serious about their companies.
Even if they did shop and spend money there it is still a great thing to do.
@LegoMan322: Exactly right.
I see the Wal-Mart store manager at the Target across the street all the time here — comparing prices.
He’s not even shy about it, scanning and punching away on his hand-held device.
@rinse: Yep. Its a comp shop and no retailer wants the competition in their stores noting the prices and selection… It doesn’t say that the CEOs are BUYING anything.
@rinse: I doubt the CEOs are doing serious shopping or price comparisons. All the CEOs and Vice Chairmen I’ve worked for have their wives do the shopping. I don’t mean anything insulting by it, it’s just that these high ranking executives often work insane hours and travel extensively. They delegate their shopping. I’d be amazed to see a CEO shopping at a Target or anywhere for household goods.
They were probably checking out the competition out of friendly curiosity, to introduce themselves as a gesture of goodwill. Also the new competition is going to come up in their meetings and business plans in the future “how to keep up with the new neighbor.” They need at least a basic working knowledge of the store.
If they were simply comparing prices, they might have a store manager do it on a more regular basis, rather than a CEO doing it themselves. They delegate that sort of thing. Most of them delegate most anything they possibly can, either through their wife or a personal assistant or household staff.
I think the visit was dual-purpose. A friendly gesture of goodwill and introduction combined with eyeballing the competition so they are simply familiar with it.
@Julia789: Know your enemy.
hey are at target because most walmarts are dirty. i hate going to walmart because of the horrible atmosphere
@talamant3z: You’ve never been to a Walmart in Bentonville, AR have you? I would eat a gourmet meal off their immaculately shiny hard wood floors.
@maddypilar: I said that very same thing! FTW!!
@talamant3z: Thank you. Ours are mystery substances on the floors, festival concert aftermath disgusting.
I have not been to the Bentonville one since the early 90′s. It was one of the first supercenter stores. They had staff on rollerskates to get around. Of course that one is nice and clean. It is a corporate flagship store.
@talamant3z: The Walmarts in Arkansas are spotless. I would not be scared to eat off the floor. They are all incredibly well stocked and always look sharp.
@wellfleet: The Walmart here where I live is also spotless. The first time I entered the grocery section, I thought I was stepping into a photo shoot. Everything was shiny and all the items were lined up perfectly with everything at the same angle. It was amazing.
I mean, I still shop at HEB and Target instead, but I was impressed.
@talamant3z: Srsly, how revolting must the FIRST walmart be? I bet it’s a dirt floor over linoleum over another dirt floor.
@HFC: Alaska is AL.
@TCama: No.
@TCama: ERROR!
FAIL!
@TCama: that’s alabama
@gStein: No,no, Alabama is AB.
(I just wanted to see how long I could make this thread go on.)
@Shadowman615:
LOL. Alabama is AL!
@DePaulBlueDemon: What are you people talking about?? AL, AK, AB?? All this internet shorthand is driving me KRAZY (KR)!
What does it mean?
@Easton21: Ask the PO.
@Easton21: Not internet shorthand-state abbreviations.
@Shadowman615:
My favorite is Maine. Because it’s all about ME!
Checking out the competition is fine. What got my goat when I worked retail was when my department store manager would run an attendance-required pep rally in the morning calling competing department store associates our “enemies” — and take their store manager to lunch that afternoon. (Trust me, he was NOT interested in her.)
likely checking out prices and looking for tips.
Ok? I work for a big box pharmacy and gasp! sometimes I shop at the competition. Depends on how much of a hurry I’m in (it’s closer to my apartment).
It’s 80 degrees here in Alaska today. I can see Wal-Mart from my house!
That aside, yeah, living in Wal-Mart World can suck sometimes if you like Target. Here in Arkansas-Alaska, the news is Wal-Mart this, Wal-Mart that. Which I understand. But it still gets old. And I still prefer Target.
@lalaland13: Now that your state has been combined with Alaska, can you see Russia out your other window?
@lalaland13: And having all the vendors here this week, while good for our local NWA economy, can be a pain.
Submitted this story at Forbes.com yesterday morning, apparently it didn’t make the cut. Can’t imagine why:
Wal-Mart’s Weight Effect – [tinyurl.com]
A study shows that shopping at Wal-Mart was associated with healthier eating habits over time – specifically, “we found that Wal-Mart’s effect on weight is largest for women, the poor, African-Americans and people who live in urban areas.”
@TomCoughlin: Oh whiiine, they didn’t choose your story!
@nakedscience: Calm down. I’m not whining, and it’s not “my” story. Just seems like it would be appropriate, considering the vast number of anti-WalMart stories they publish, to put one up that contains helpful, relevant information about WalMart. Not sure why you felt the need to attack…
I think Tom has a fair point.
@TomCoughlin: Interesting article. It offers a nice explaination of the income and substitution effects–I might add it to my reading list for next semester.
The result makes sense: there is the bizarre fact that terrible-for-you processed foods are cheaper than “whole foods” (meaning ingredients, not stuff from Whole Foods). If you can buy the stuff you need cheaper, you can gradually make the switch to healthier choices.
This being said, the academic in me wants to read the actual journal article this summary is based on. I want to see some betas–this seems like a case where it could be statistically significant, but not economically so–people weighed one pound less in Wal-Mart communities than non-Wal-Mart communities. Even if that is statistically significant, so what?
@babyruthless: Also, I’m not sure about the so-called conventional wisdom that “cheap food leads to more eating”
Here’s the real paper if you’re interested. I am feeling quite procrastination-y today, so I think I will give it a perusal.
[papers.ssrn.com]
@babyruthless: Yeah, the article is short on data, I just thought it offered an interesting counterpoint to the stereotypical view of WalMart as some kind of force for all that is evil. Big box stores, WalMart in particular, are often denied permission to open in urban areas, and the study offers a good reason to change that practice.
@TomCoughlin: As I suspected, the results are pretty small:
The introduction of a “regular” WM per 100k residents leads to a decrease of .46 lbs at the sample mean height.
A Super WM decreases weight by 0.18 lbs, and a Warehouse club decreases weight by 0.23 lbs, which is statistically insignificant.
More promising: a discount store decreases the liklihood of being overweight by 1%, and the liklihood of obesity by 0.4%, which given the number of obese people in the US, is not negligible.
However, they also find that the presence of a Wal-Mart decreases the likelihood of getting regular exercise by 2.3 to 2.9%. The presence of Super Wal-Mart means that people who already drink do so more heavily, increasing their # of drinks by 2.3%. Similarly, warehouse clubs cause smokers to smoke more heavily, causing them to increase their smoking by 2.6%.
The projected decrease in health care costs brought about by a decrease in obesity are essentially washed out by the projected increase in health care costs brought about by an increase in smoking and drinking.
So, it appears that Wal-Marts lead to a slightly healthier diet, and slightly less healthy other habits, which is probably a wash. From the conclusion of the article:
“Local governments should not resist Wal-Mart or warehouse club entry…out of fear that their effect on food prices would increase obesity. The possible effects of drinking and smoking, however, should be considered, especially considering the numerous negative externalities–such as drunk driving accidents, second-hand smoke, and Medicare and Medicaid expenses–associated with these activies….”
/review
I don’t think that I’ve ever heard that argument–that Wal-Mart drives down food prices which causes obesity–when arguing against Wal-Mart. I’ve usually heard claims of unsightliness, unfair treatment of workers, and driving Mom & Pops out of business.
@TomCoughlin:
It’s ok if they don’t drive out the little stores. There’s a little store here that is in a somewhat crappy neighborhood that sells produce really cheap. I go there at least as often as I go to Walmart because they have bagged salad for 50 cents (!!!). If there is affordable healthy food, then people will buy it. Not everyone, but most people would if they could. They KNOW the other stuff isn’t good for them.
I also find it interesting that your avatar’s namesake shares a name with Walmart’s former vice chairman.
@babyruthless: Communities that lack a Walmart store are either high end communities that didn’t want a Walmart mucking up their scenery or a community so run down even Walmart won’t put up a store.
So those lower income communities lacking a Walmart may be the situation of lacking ANY grocery stores at all in the area. The people living there either have to travel 10-20 miles to find a grocery store or live on fast food restaurants and whatever they can get at a corner store/convenience store. There are some interesting studies showing how obtaining proper food or the lack of, is a major factor in obesity and health problems for the poor and working poor.
Having a Walmart vs. having a McDonalds and a convenience store. Of course having a Walmart is an improvement. Having a variety of grocery stores that stock healthy food would be much better.
@bohemian: Alot of Walmarts already have a McDonalds in them as the captive store “restaurant”…
@bohemian: I am aware of “food deserts” and this may play a small role in what they are finding, but they are examining the substitution and income effects of Wal-Mart. Further, the data goes back to 1988, and it certainly wasn’t the case that 20 years ago, the only places without Wal-Marts were either too ritzy to want them, or too podunk to be wanted by WM. This paper challenges the (somewhat questionable?) premise that lower food prices will lead to more eating and therefore more obesity. They find (not surprisingly, I claim) that the picture is more nuanced than that.
Proof that the CEOs aren’t poor. If they were, they’d be shopping at Wal-Mart. ZING!
@Easton21: I didn’t realize people thought CEO’s are poor? FAiL?
@bigmil87: Understanding joke FAIL.
@bigmil87: I didn’t realize people are still clueless about when to use apostrophes and question marks.
Next time, don’t go out of your way to be a dick.
Nothing wrong with this. They need to scope out the competition. Also, if you work at McDonalds, does that mean you have to eat only McDonalds food? You’d get sick of it and have to go eat somewhere else eventually. Never forget, these are still human beings. You can’t tow the company line 100% of the time.
Also, Rogers/Bentonville is still a relatively small area; Target is shiny and new, so everyone goes by to check it out. Wal-Mart #1 is the store where WM execs tour around corporate visitors, so it’s clean, bright and well-stocked. Sorry, no snark here, I’m just glad we have both.
Wish the K-Mart top brass would shop at Wal-Mart!!! (They obviously have to, since things are out of stock in K-Mart all the time.) They ought to learn how to run a store…! Wal-Mart has cash registers open! Hello?
If K-Mart would just match Wal-Mart and play up the Craftsman “still made in USA” (well, some of their stuff) a lot of anti-Wal-Mart types would shop there.
Current And Former Walmart CEOs Shop At Target …
’nuff said.
The CEO makes some good money, and can afford to pay extra for better quality and more pleasant shopping experience. Wal-mart’s target audience is people who want the lowest price, regardless. We’ll call them cheapskates.
As long as there are more cheapskates than CEOs in the world, Wal-Mart will be fine.
comp shopping. why the spin?
I grew up in NWA and worked at W-M headquarters for 8 years. It’s common practice to walk into competitors stores and see what they are doing.
I live and work near the Dollar General Corporate HQ in Goodlettsville, TN (a suburb of Nashville, TN). Close by there is a Dollar General store and a Fred’s Dollar Store right next to eachother in the same former gocery store building. I could immagine that the DG brass surf throught that store on occasion.
That said, if Target were smart they could mess with Walmart by carrying special items or deals in just that one store near Walmart’s HQ.
Hope they keep their receipts!
And doesn’t everyone who looks at this website have Target CEO Greg Steinhafel’s number?
So they frequent Target to find out how things SHOULD be done and then go back to Wal-Mart and do the opposite.
Nice.
And while they’re there, they should pay attention to prices, which seem to be creeping below Wal-Mart.
I have an idea. Why don’t they visit Wal-Marts instead? Yesterday’s Wal-Mart adventure included pallets of inventory blocking access to other inventory, the smell of feces lingering in the air from someone who decided to change a diaper in the middle of the store, the typical site of 38 checkout lanes with about 5 open (and people stacked three or four back), poorly stocked shelves, and more.
Wal-Mart USED to be a pleasant place to shop in the early 80′s. Now they’re like the DMV, a place you wind up having to go and hating every minute of it.
An alternative to the evil Wal-Mart!
DOWn, baby, DOWn!
So now you know why the newer Smileymart store prototype looks like a clone of Target.