Discount Retailers Presented by: Kent Hart Greg Godwin Tim Munyon

The Big 3: Target Stores, a division of Registrant Corp. K-Mart Inc. Wal-Mart, Inc.

Started as a Division of Dayton Hudson stores in 1961 Opened the first store in Roseville, Minnesota in 1962 Target was the first retail store to offer well known national brands at discounted prices In the 1990’s Target launched their first “Greatland” store and their first “Super Target” with groceries and services with a target greatland store

In 1899 S.S. Kresge started a 5&10 cent store The company grew into a chain of 5&10’s In 1962 K-Mart was started with 18 K-Marts In 1984 K-Mart had over 2000 stores and started acquiring other specialty retailers In 1992 it started selling off these specialty Stores In 1995 they restructured to stop declining profits In 1996 they started changing stores to “Big K-Mart”s

Began in 1962 in Rogers, Arkansas Grew with the opening of new stores Grew with acquisitions of Mohr-Valu & Big K In 1988 opened the first “Supercenter” in Washington, Missouri that has a grocery and Wal-Mart store under one roof Owns and operates SAM’S Clubs In 1991 began operating locations internationally

Financial Performance

Wal-Mart Stores, Inc. “Big Daddy” The largest retailer in the world with 2000 sales of $165 billion Sales growth of 20% in 2000, mostly from international expansion Operating income increased by 21% due to cost savings and efficient distribution

Target Stores “The niche maker” Revenues were $26 billion, or 15% of Wal- Mart’s earnings Net earnings in 2000 were $1.1 billion 4th straight year of 20% plus growth Operates 912 stores nationwide

K-Mart, Inc. “Recovering…almost” 2000 earnings were $35.9 billion, or 21% of Wal-Mart’s earnings Growth was a flat 4.8% Net earnings were $430 million K-Mart operates 2171 stores worldwide K-Mart relied heavily in 2000 on its revolving credit line to finance operations

Strategy

Wal-Mart Stores, Inc. Already the low-cost leader; focusing on diversification into new markets and new products to continue revenue growth Core Competencies/Strengths: –Distribution –Supplier Relationships –Inventory and cost control

Target Stores Target has found a niche between the discount retailer and high price retailers; focusing on name-brands and low cost Core Competencies/Strengths: –Quality name brand –Excellent use of space and square footage –Quality niche in a fiercely competitive market

K-Mart, Inc. K-Mart has been transitioning its stores to Super K-Marts, a format that offers the potential for higher margins and more traffic; for the time being, they are a contended follower Core Competencies/Strengths: –Name recognition –High traffic real-estate

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