Wal-Mart Plans Their Strategy to Come Out from Under Target Stores' Coat Tails

The world's largest retail chain, Wal-Mart, seems unable to stay out of the negative spotlight. Still licking their wounds from all of the bad publicity brought on by former female employees that were grossly underpaid and not allowed advancement into management as quickly as their male coworkers, Wal-Mart forces low income families to shop elsewhere if they need the convenience of paying off Holiday purchases over time. Just before the Holidays the retail giant is disbanding their lay-away program in mid-November. Ending lay-away may cause more harm than good for Wal-Mart stores that are in low income regions. The adage "any PR is good PR" isn't so for Wal-Mart.

Wal-Mart has suffered a blow to their fashion sales, simply because the clothing was too trendy, and the average Wal-Mart customer isn't a trend setting fashion plate. With so much loss in the fashion department, and with the cost of remodeling of their stores nationwide, Wal-Mart is struggling to recoup their losses by waging price wars with electronics and toys this Holiday season.

Other retail chains and smaller individually owned businesses will have to make drastic price changes that may actually put them in the red, just to keep up. Wal-Mart is increasing its rollback advertising this Holiday season in effort to reach more people and increase their sales potential.

The drop in gas prices this past summer's end, also didn't help Wal-Mart financially. Wal-Mart is at only a 0.5% same-store gain, while Target stores are at a reported 3.9% same-store sales gain. The more aggressive rollback campaign will have to be more successful than it has been in the last few months to give Wal-Mart the numbers it needs to keep ahead of the competition and put back revenue lost from failed fashion sales and renovations.

Holiday spending also depends on the job market. If consumers' don't have job security, they will spend less. The job market has been steady in the last few months, but business growth has slowed down. This slow growth can slow Holiday sales down and give retail stores another kick to the budget they didn't foresee. Wal-Mart is likely to see their sales plummet from last year's numbers, regardless of how well they market themselves pre-Holiday season rush.

Only after the Holidays are done and over, and the numbers are tallied, will Wal-Mart know how well they held up against competitors like K-Mart and Target stores. The outlook is grim for them now, unless their numbers drastically increase, they will be riding the coat tails of Target this Holiday season.