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Discount Retailers

Discount Retailers

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Discount Retailers

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  1. Discount Retailers Presented by: Kent Hart Greg Godwin Tim Munyon

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

  3. 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

  4. 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

  5. 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

  6. Financial Performance

  7. 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

  8. 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

  9. 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

  10. Strategy

  11. 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

  12. 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

  13. 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

  14. Questions/ Comments Thank You For Your Attentiveness