CFO Logo

Wednesday, August 20, 2008

Is The Drugstore Game hurting Target?

I just read that Target's quarterly profit fell 8% last quarter. The same article reports that Wal-Mart's profits rose 17% and attributed the difference to customers' perception of Wal-Mart as the place to go for the best prices on basics, and Target as the place to for the best prices on trendy stuff. The article quotes an analyst who says Target needs to market themselves as a store that can help families save money during tough economic times.

I don't shop at Wal-Mart because there isn't one convenient to me, but I see many of its prices on various coupon web sites that I routinely read. And so I know that their prices seem to be lower - at least generally - compared to Target's. In fact, Target's prices are often higher than supermarket sale prices, especially when coupons are factored in. For example, this week, Target has Frosted Flakes cereal on sale for 2 for $5. But last week at Pavilions (a Safeway company store), there was a "super coupon" for 2 for $3.

Having said that, I still go to Target at least once a week. This week, I picked up a pack of Luvs diapers. Jumbo packs are on sale for $6.99, and I had a $5 off coupon that I'd received in the mail a while back. I've never tried Luvs and was waiting for a sale just like this to try them out. (Angie at Baby Cheapskate was happy with them, so I'm optimistic. I'll let you know my thoughts after Tyler wears a few. But it's worth noting here that the Luvs jumbo pack of size 5s contains 30 diapers, whereas the Pampers jumbo pack contains just 26.)

But I just don't spend as much money at Target as I used to. I'll walk past bottles of shampoo and conditioner on the clearance shelves and shake my head. I can get those for free at a drugstore, I'll say to myself. I've even passed up Pampers on clearance at Target, even though I have coupons, because I can get them for even less at CVS.

Obviously, I haven't single-handedly reduced Target's profit by shopping there less. But if there's a whole bunch of us that have turned to The Drugstore Game to buy what we used to get at Target, then maybe The Drugstore Game has had an impact on Target's profit. What do you think?



  • At 8/20/08, 12:59 PM, Blogger FunkyFrum said…

    I shop at Target still for a few reasons. 1. I don't like Walmart's business practices, 2. It is close enough that I can walk and 3. I like the atmosphere. While I don't get things there that are not on better sale somewhere else (like I don't food shop there), I regularly scour the clearance racks for things that we need, and I still feel that I am in Target at least once a week for something on sale.

  • At 8/20/08, 1:41 PM, Blogger adrienne said…

    I loathe Wal-Mart. My discount store business goes to Target at home and Meijer whenever we travel near one.

    Target shot themselves in the foot a few years back by getting rid of useful sections like auto headlight replacement bulbs and sewing notions. Sure, these items aren't big sellers, but the ability to get them all in one place is very appealing.

    So now, when I need a taillight bulb I hit the auto parts store and replacement needles I go to the local sewing machine shop. There's a CVS near either of those places, so I rarely swing by Target on those trips.

    Their pharmacy closes very early and they keep inexplicable things like glycerin behind the counter, so there's no point in going there after 7 if you are planning on making homemade bubbles.

    The Dollar Spot is sooo tacky and prominent. Those goods are of questionable quality and looking at that section when I enter the store makes me feel like the world is turning into Wal-Mart.

    Target was a better store 10 years ago, but they bought into a marketing scheme that's alienating much of their old audience.

    Plus, a lot of people here got peeved over their Salvation Army bell ringer policy and have been boycotting for almost a year now. They've never managed to make amends with that population of formerly faithful shoppers (like my mom).

  • At 8/20/08, 1:57 PM, Blogger Helen said…

    Believe it or not, there is NO Target convenient where I live. However, I do go to a Super Target near my church, but cannot buy cold things as it is quite the distance from home.

    I do see their groceries as being good deals when on sale and I have a non-expired coupon. I also love their clearance racks, as combined with the coupons they are good. I never buy clothes there...when I was younger and a bit on the heavy side, there was a gap in sizes between the "juniors" and the "misses" that was MY size! I still never buy things because they seem to be of a poor quality for the price, and also made in funny proportions.

    I do shop at Wal-Mart as I drive by on my way home from work, and I like their prices and their clothing. If I had a SWM anywhere nearby I would most likely do all of my grocery shopping there as the prices are phenomenal!

  • At 8/20/08, 3:37 PM, Blogger Tony's Mom said…

    If you still have the $5 luv coupon, you can combine it with the target luv coupon. Here is the link: It will make the diaper 99 cents a jumbo pack!

    I use luv sometimes, and it works fine.

  • At 8/20/08, 5:04 PM, Blogger Michelle said…

    I don't like Wal-mart, it's always a zoo.

    I LOVE Target - but since I've discovered CVS & Walgreens - I rarely shop there anymore.

    I totally think you've got a good theory here...

  • At 8/21/08, 6:38 AM, Blogger marci lambert said…

    i think another of target's problems is their coupon policy, which seems to change on a daily basis. i was so aggravated one day when they wouldn't accept some coupons (i told them to take the stuff off my receipt instead). when i emailed corporate for the policy, i learned i was right in the way i was using them. i've read on several forums that many, many people have had problems. and for those who are looking for bargains and trying to use coupons, it's been too much hassle.

    i still go to target for some things, but the majority of what i used to buy there i now buy at walgreens.

  • At 8/23/08, 1:16 PM, Blogger Chief Family Officer said…

    @Funky - I wish I could walk to Target, that would be awesome. I think Target will always be my first stop when I need something immediately (for example, I picked up some Drano yesterday) but I spend hundreds less per month than I used to.

    @Adrienne - I agree, Target's selection has gotten slimmer. I hadn't thought about the SA thing, but to be honest, I'm okay with it b/c it means no one else can solicit there either. I hate it when there are petition signature hunters outside Whole Foods!

    @Helen - Oh no, no Target! Although I must say, I envy you having access to a Super Target, I don't think there's one within 25 miles of us. On the cold things - can you bring a cooler in your trunk? Back when I used to hit two or three different markets in one trip, I would keep a large cooler in the car and put the perishables in there while I made my other stops.

    @Tony's Mom - Darn, I bought my Luvs before the Target q came out, otherwise it would have been an even better deal!

    @Michelle - I knew I wasn't the only one!

    @Marci - Great point about the coupons, it's super frustrating!


Post a Comment

Links to this post:

Create a Link

<< Home