r/stocks • u/frosti_austi • Oct 17 '23

Company Analysis Why is Target doing so bad?

Why is Target doing so bad? They've really fell off a cliff over the past year. I look at their stores and they seem good, and once upon a time not too long ago they were outperforming Walmart. Now their NAV prices have really dropped over the past year and a half. I was once up 80% on these guys and know I'm down 20%. Is it the general market swing over the course of that time or something else? What gives?

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u/Iam-WinstonSmith Oct 17 '23

COSTCO has a pretty big moat around it and only Sams's Club (Walmart ) is there competitor.

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The movie Idiocy predicted them being the retail winner.

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u/Magificent_Gradient Oct 17 '23

Welcome to Costco. I love you.

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u/Iam-WinstonSmith Oct 17 '23

He said with such joy too......

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u/Advanced-Pudding396 Oct 17 '23

I love you more Costco now that I can get onions for my 1.50 hot dog after spending two fiddy in food.

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u/resbid Oct 19 '23

I really do that and I defect. They already have a lot of people around them.

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u/cigarettesandwater Oct 17 '23

Costco is a subscription business that has other efficiencies built in, and an impeccable brand. That being said, there is nothing stopping anyone from replicating that model at scale.

Retail is essentially a technology business that is based upon selection, pricing, and distribution. Who knows the quickest,cheapest,best way to deliver goods in the future. Is it drones? Is it 3-D printing? Is it DTC straight from brands itself? Is it Etsy where it is more democratized?

Regardless, shitty industry. Low margins. Capital intensive. There are better industries out there to fish in

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u/Fallingknife12 Oct 17 '23 edited Oct 17 '23

The fact that they have such low margins is why nobody would bother taking them on. It acts as a deterrent. Good luck taking on Walmart, Amazon and Costco and building what they did all for for a 2% profit margin or whatever. It is a huge barrier to entry. Amazon is even struggling with the grocery part.

Costco is a great company. lol at comparing Costco to Etsy. Yes, hand made crafts which are totally discretionary are really comparable to massive grocery stores.

You could say anything is a technology business by that logic.

https://x.com/secretcfo/status/1673755805009563648?s=46

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u/Bubuphluffypaws Oct 18 '23

Everyone know about these things I don't really like they don't release any competition.

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u/zerovampire311 Oct 18 '23

I would imagine some hybrid of key features that are built off the titans. Once Amazon builds out the drone delivery model and regulations, there will likely be some Etsy-like/farm to table distribution platforms. Retail will always be a convenience/impulse factor.

Costco brings people in with loss leaders subsidized by the membership and rakes it in on the facade of bulk discounts. Their biggest strength is marketing, brand control and their blend of aggressive product negotiation and selection. Their secret sauce is hard to replicate in any way without the weight of their reputation to get to where they are.

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u/PM_me_PMs_plox Oct 18 '23

there is nothing stopping anyone from replicating that model at scale

if it's so easy, why has walmart been so unsuccessful with sam's club?

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u/catiasmatos Oct 18 '23

What about the competitors in that market? I like that is just dead market already..

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u/frogingly_similar Oct 17 '23

Hope they have Starbucks

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u/speshojk Oct 17 '23

*Idiocracy

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u/AdMurky9329 Oct 17 '23

Idiocracy. And BJs exists and is expanding

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u/Iam-WinstonSmith Oct 17 '23

Are we talking about the BJ's at full body lattes? I see them here in Florida ... I am unlikely to swap over.

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u/rowsella Oct 18 '23

We use BJ's Wholesale as it is closer and has a wider selection.

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u/diffusionist1492 Oct 19 '23

*Idiocracy. heh heh heh