NEW YORK (AP) — Target Corp. is going bananas to keep up with Wal-Mart Stores Inc.
The discounter, known for stylish towels and jeans, has long sold groceries. But it is barely holding onto its customers while its chief rival, Wal-Mart, is rapidly picking up new shoppers as its powerful low-cost message resonates in the recession. So Minneapolis-based Target plans to stock more fresh food — including bananas — and play up its low prices.
Meanwhile, Wal-Mart, the world’s largest retailer, is expanding its selection of nonessentials like home furnishings, while improving the quality of its store-brand food like thin-crust pizza and ice cream.
Activist shareholder William Ackman has for several months been using Target’s struggle with Wal-Mart as ammunition to push Target shareholders to change its board at their meeting, to be held Thursday at an unfinished store in Waukesha, Wis. Ackman has said his five picks, including himself, would provide fresh perspective, increase profitability and re-energize the stock, which has dropped 42 percent from its high of $70 in July 2007, though it has rallied since March.
Tim Jasinski, 51 — who was filling his basket with pasta, red wine, cream sauce and a can of mushrooms at a Wal-Mart store in Waukesha last weekend — says he rarely goes to Target anymore. When he was employed, he said, he would go to Wal-Mart only when he wanted DVDs or other electronics at discount prices. But he’s been shopping at Wal-Mart for just about everything from food to socks and underwear since he was laid off from his job as a machinist in November.
“Sure, they have some better things,” Jasinski said of Target. “But money is more important.”
About 37 percent of Target’s revenue comes from necessities like paper towels and food. For Wal-Mart, that figure is about 60 percent.