Share gains coming, but not the next Walmart
Target is expected to gain about $3 billion in market share during the next few years as the company completes the rollout of its PFresh program, according to Credit Suisse analyst Edward Kelly.
In a proprietary analysis of PFresh published last week, Kelly sought to quantify the impact of Target’s food initiative, which he indicated has become a key concern for investors in supermarket stocks. Kelly’s key conclusions are that Safeway and Supervalu are likely to be impacted the most while Kroger will be impacted the least because the latter already faces significant discount store competition from Walmart, and Target has had the least success with PFresh in suburban markets where Walmart supercenters already exist.
“Despite Target’s initiative to materially expand its food offering, we do not expect Target will represent the same headwind as Walmart did over the past decade,” according to Kelly. “Target holds a 3% market share of the grocery channel, up approximately 200 basis points since 2000. In comparison Walmart was the share leader back in 2000 and the company has double its market share to about 20% since then.”
Kelly estimates Target’s PFresh initiative will likely increase the company’s markets share by approximately 50 to 100 basis points over the next two years.
“The bigger issue is that Target represents just another example of a non-traditional retailers using the supermarket’s core product offering as a traffic driver,” according to Kelly.
More admired than Costco, not as much as Walmart
The March issue of Fortune contains the magazine’s annual ranking of the most admired companies, and this year’s list shows Target ranked 22nd. Only Walmart (11) and Nordstrom (21) were ranked ahead of the company. Other notable retailers on the list who ranked lower than Target included Costco (29), Best Buy (36), eBay (45) and Lowe’s (49).
Some very familiar names dominated the top 10 including top ranked Apple, followed by Google, Berkshire Hathaway, Southwest Airlines, Procter & Gamble, Coca-Cola, Amazon.com, FedEx, Microsoft and McDonald’s.
To produce the list, Fortune works with the Hay Group who starts with about 1,400 companies whose revenues exceed $10 billion. Hay Group sorts them by industry and selects the 15 largest for each international industry and the 10 largest for each U.S. industry. A total of 667 companies from 33 countries were surveyed. To create the 55 industry lists, Hay asks executives, directors, and analysts to rate companies in their own industry on nine criteria, from investment value to social responsibility.
To arrive at the top 50 Most Admired Companies overall, the Hay Group asked 4,170 executives, directors, and securities analysts who responded to the industry surveys to select the 10 companies they admired most. They chose from a list made up of the companies that ranked in the top 25% in last year’s surveys, plus those that finished in the top 20% of their industry.
Cabela’s engages cloud computing services from Reflexis
DEDHAM, Mass. — Cabela’s Inc. announced that it has implemented Reflexis Task Manager and StoreWalk to increase efficiency and improve the store-level execution of its retail strategy.
The Reflexis cloud computing solutions enable retailers to streamline corporate-to-store communication, ensure consistent execution of in-store merchandising and promotional plans, and improve compliance with safety and operational policies, according to a press release.
Marlon Giese, Cabela’s retail communication manager, said, “Store managers and employees now view a list of prioritized tasks in one system, instead of planning, replying, and following up via e-mail, voice mail, and other communication,” he said. “The task management system also enables us to monitor job completion and compliance levels in our stores, which was not really possible by e-mail alone.”;