Target vs. Walmart: Who Wins the Basket?

Two strategies, two customer mindsets and a rivalry that keeps reshaping retail.

August 1969, Bentonville, Arkansas. In a modest office perched above a small-town barbershop, Sam Walton sat at his desk, phone pressed to his ear, a deep crease forming on his brow. The founder of Walmart was in the fight of his life, not against a competitor, but against the ticking clock of financial ruin. His desperate plea for an increased credit line was met with unyielding resistance from a bank official in Dallas.

“Mr. Walton, you’ve already borrowed $2 million. Adding another $1.5 million would be reckless,” the voice declared firmly.

Sam’s heart sank. Without those funds, his fledgling chain of discount stores would collapse under its own weight. But Sam Walton was no stranger to adversity. He wasn’t ready to let his dream die, not when he could take one last shot. Slamming the phone, he grabbed his keys, stormed down the stairs, and headed for the nearest airport. If words couldn’t convince the bank, maybe his presence would.

This tenacity wasn’t just a one-time effort; it defined Walton’s approach to retail. He saw opportunities where others saw obstacles, and his determination set the stage for Walmart to become a dominant force in the retail industry. But Walton wasn’t the only contender in this arena. From Minneapolis to Michigan, rivals like Target and Kmart were also vying for the same crown: the king of American discount retail.

While Walmart built its empire by slashing prices and streamlining operations, Target sought a different path. In the suburbs of Minnesota, the Dayton Company had launched Target as a “higher-end discounter.” The idea was revolutionary: combine a discount store’s affordability with a department store’s style and quality. Yet, in its early years, the strategy wavered. By 1963, Target was grappling with millions of dollars in unsold inventory, a crisis threatening its expansion.

Douglas Dayton, the company’s young and ambitious president, saw the writing on the wall. To succeed, Target needed to refine its approach. After an aggressive clearance sale cleared the stockrooms, the company paused new store openings to reassess its strategy. This decision to step back and recalibrate would ultimately pay off, as Target began to craft a reputation for innovation in retail design and marketing.

At its heart, the battle between Walmart and Target wasn’t just a fight over market share but a clash of philosophies. Walton’s scrappy determination and relentless cost-cutting ethos contrasted sharply with Target’s polished branding and focus on customer experience. Walmart thrived on efficiency, sharing motel rooms on business trips, driving beat-up cars, and relentlessly negotiating with suppliers to secure the lowest prices. Target, on the other hand, invested in creating a shopping environment that felt more curated and enjoyable, aiming to attract middle-class families who wanted bargains without sacrificing quality.

This difference in approach extended to their geographic strategies. While Target concentrated on suburban areas, Walmart took root in small towns. Walton understood that rural America was underserved and capitalised on this by building stores close to home. This focus allowed him to keep distribution costs low and build a loyal customer base.

By the 1980s, the stakes had risen dramatically. Now a rising star, Walmart turned to technology to gain an edge. It introduced barcodes and handheld scanners in its stores, streamlining checkout and inventory management. Orders were sent electronically, allowing Walmart to restock shelves in hours instead of weeks. Kmart, Walmart’s most significant competitor at the time, still relied on outdated manual processes, leaving it vulnerable.

Target, meanwhile, sought to differentiate itself through a unique blend of style and service. It reimagined store layouts, introducing the “racetrack” design, a circular aisle that guided customers through the entire store, exposing them to every department. The strategy worked, driving higher sales per square foot.

As the years rolled on, the competition intensified. Target leaned into its identity as a trendier alternative to Walmart, stocking designer collaborations and emphasising customer service. Walmart continued its aggressive expansion, swallowing smaller competitors and refining its supply chain to achieve unmatched efficiency. The two companies would eventually clash directly, each encroaching on the other’s territory to dominate every corner of the American market.

The retail clash between Walmart and Target is more than just a business story, it’s a testament to the power of vision, persistence, and adaptability. Walton’s unwavering belief in the value of frugality and operational excellence transformed Walmart into the world’s largest retailer. Meanwhile, Target’s commitment to blending value with quality redefined what discount shopping could be.

The battle continues today, with both companies evolving to meet the challenges of e-commerce, shifting consumer preferences, and global competition. But the roots of their rivalry, the unyielding drive to serve customers better, faster, and cheaper, remain as relevant as ever.

The Titan from Bentonville: The Evolution of a Retail Powerhouse

December 1992, Bentonville, Arkansas. CEO David Glass prepared for his latest media engagement in the modest yet buzzing headquarters of Walmart. With his trademark furrowed brow and clipped manner, Glass stepped into the company’s studio, set to be interviewed by NBC’s Dateline. It was a significant moment, only eight months since the passing of Walmart’s legendary founder, Sam Walton, and Glass now carried the weight of a retail empire that had become the world’s largest.

Sam Walton’s Walmart had been a lifeline for countless families, offering low prices and access to goods once out of reach for rural America. From his well-worn pickup truck to his occasional trips in beat-up planes, Walton’s down-to-earth demeanour reinforced the idea that he was one of them, a man of the people. However, with Walton’s death, cracks in Walmart’s image began to show. The company had grown so massive that some no longer saw it as a champion of the everyday consumer but rather as a relentless corporate juggernaut.

That day in Bentonville, Glass faced a shift that would mark a turning point for Walmart’s image. The NBC reporter’s questions started predictably enough, about Walton’s legacy, Walmart’s growth, and the company’s ability to sustain its trajectory. But then came the curveball: a tape of a factory in Bangladesh appeared on the screen, exposing child labour practices connected to Walmart’s supply chain. The revelation was jarring, and the images that followed, a fire that had claimed the lives of young workers, were devastating.

When pressed, Glass attempted a careful response. “To my knowledge, we work only with vendors that comply with our standards,” he said cautiously. But the damage was done. The scandal cast Walmart in a harsh light, and though sales didn’t take an immediate hit, the company’s carefully cultivated public image would not emerge unscathed.

As Walmart stumbled under the scrutiny of global labour practices, its rivals saw an opening. Chief among them was Target, the stylish alternative steadily building its reputation in suburban America. Where Walmart promised the lowest prices, Target offered an elevated experience, cleaner aisles, better lighting, and a curated selection of goods.

However, Target’s leaders knew that to outshine Walmart, they needed more than just a better ambience. They needed to exploit Walmart’s vulnerabilities. By 1993, Target began its most aggressive marketing campaign yet, painting Walmart as a company that had strayed from the values of its beloved founder. One ad read, “This never would’ve happened if Sam Walton were alive.” It was a provocative claim designed to stir emotion, tying Walton’s values of honesty and fairness to the practices Target claimed Walmart had abandoned.

Walmart’s leadership bristled at the accusations. For David Glass, the campaign struck a personal chord, he had been close to Walton and took pride in carrying his vision forward. The hastily prepared and distributed rebuttal ads positioned Walmart as the true heir to Walton’s legacy, dismissing Target’s campaign as opportunistic. “What Sam stood for is alive and well at Walmart,” one ad declared. “We’re proud of our associates who embody his principles daily.”

Despite these efforts, Walmart’s struggles in the Northeast continued. Resistance from communities wary of its impact on local businesses slowed the company’s expansion. In towns like Sturbridge, Massachusetts, grassroots campaigns fought to keep Walmart out, fearing it would overshadow small-town charm with sprawling supercenters.

A mother of six, Carol Goodwin became the face of one such campaign. Her meeting with Walmart’s public relations head was polite but firm. “Sam Walton once said he wouldn’t go where a community didn’t want Walmart. I think he would’ve listened to us,” she insisted, pointing to a passage in Walton’s autobiography. The PR team was unfazed, emphasising Walmart’s role in job creation and economic stimulation. The battle raged, delaying Walmart’s northeastern conquest and giving Target valuable breathing room.

Target began experimenting with new formats to distinguish itself further as the two giants squared off. By the mid-1990s, it launched the “SuperTarget,” a combination of a discount store and a grocery. The logic was simple: customers often shop for food rather than general goods. Target hoped to increase foot traffic and drive additional sales across its aisles by bringing groceries into the fold. The strategy worked, and the concept gained momentum.

Meanwhile, Walmart doubled its expansion efforts, particularly in the international market. Glass’s vision for the company was bold: achieve $10 billion in international sales within five years. Back home, Walmart aggressively pursued the Supercenter model, which it had pioneered years earlier. By combining general merchandise with groceries, Walmart Supercenters became a one-stop shop for everything from milk to motor oil.

Yet, for all its operational might, Walmart struggled in areas where Target excelled: style and branding. Target’s marketing team leaned heavily into aspirational campaigns that redefined what it meant to shop at a discount store. By working with renowned designers like Michael Graves, Target elevated its image, offering chic, affordable goods that resonated with middle- and upper-class shoppers. The difference between the two brands was stark: Walmart was practical, and Target was fashionable. Where Walmart spoke to necessity, Target inspired desire.

By the end of the 1990s, the battle lines were clear. Walmart had cemented itself as the low-price leader, but its scale made it a lightning rod for criticism. Target, meanwhile, positioned itself as a trendy alternative, appealing to customers who wanted more than just a bargain. The question wasn’t whether there was room for both but how the two would evolve to outmanoeuvre one another in an increasingly competitive landscape.

As Walmart’s stores multiplied and Target’s style-driven campaigns gained traction, one thing was certain: the retail titans were locked in a fight not just for market share but for the hearts and minds of American shoppers.

Dressing for Battle: Walmart Takes on Target in Style

Spring 2005, Bentonville, Arkansas. The Friday morning meeting was in full swing in Walmart’s bustling headquarters. This ritual, a cornerstone of Walmart’s culture since the days of Sam Walton, was led with precision by CEO Lee Scott. The agenda was as relentless as the company itself, every challenge met with urgency and resolve. “Why is Target selling a coffee maker for $19.95 that’s better than ours?” Scott’s calm voice cut through the room. The buyer responsible didn’t deflect; he simply promised, “I’ll find out,” and began tapping out emails before the meeting ended.

It was the Walmart way: problems solved before sundown. But Scott knew a better coffee maker wouldn’t be enough to stop Target’s rising threat. The rival’s embrace of designer collaborations had transformed it from a discount store to a chic destination for affluent shoppers. For Walmart, competing on style was uncharted territory. Yet Scott was resolute, Walmart would meet Target on its turf.

Two blocks from the Empire State Building, a team of Walmart’s handpicked designers gathered in a sleek office, an unusual sight for the retailer synonymous with low prices over glamour. Claire Watts, the executive vice president overseeing Walmart’s $37 billion apparel operation, examined a prototype pair of jeans. Embellished with intricate floral patterns, they were part of Walmart’s soon-to-launch Metro 7 line.

“These feel great,” she said approvingly. The team exhaled. With her sharp eye and no-nonsense approach, Watts embodied Walmart’s push to transform its image. The Metro 7 collection, packed with silk camisoles and velvet blazers, was a bold departure from Walmart’s dependable but dowdy Faded Glory brand.

Metro 7 would first roll out in urban locations, targeting a younger, fashion-conscious crowd. The goal was to build momentum before expanding nationwide. Meanwhile, Walmart enlisted designer Mark Eisen, known for high-end collections, to develop a George ME line to mirror Target’s success with designers like Michael Graves.

But fashion wasn’t just about clothes, it was about identity. Target’s campaigns brimmed with modernity, while Walmart’s image remained tethered to the practical and economical. Changing that perception would be a monumental task.

The challenge extended beyond fashion. Walmart’s brand had become a target, criticised for everything from labour practices to its impact on small businesses. Recognising the growing sophistication of its detractors, Walmart established a “war room” in Bentonville, staffed by former political operatives. Their mission is to counter negative press and craft narratives that resonate with middle-class shoppers.

During one planning session, news of a union preparing a convention to rally against Walmart arrived. The team preempted it with a press conference in the same city, spotlighting local suppliers and employees. “We need to show people the real Walmart,” one advisor urged. The strategy worked. Media coverage balanced criticism with Walmart’s counterpoints, keeping its vast customer base engaged.

While the PR war raged, Walmart geared up for the holiday season. Last year’s attempt to play nice with competitors had backfired, handing Target a decisive Black Friday win. This time, Walmart went on the offensive, unveiling a flurry of deals on everything from laptops to flat-screen TVs. It promised to match any competitor’s price and opened stores an hour earlier than Target.

By 11 a.m. on Black Friday, Walmart’s strategy was delivering results, 75,000 laptops sold nationwide, contributing to a 4% sales increase for the month. However, despite its aggressive tactics, Walmart couldn’t entirely eclipse Target’s allure. Target’s sales rose even higher, thanks to its exclusive designer collections.

As the holiday dust settled, cracks appeared in Walmart’s fashion experiment. Metro 7, designed for trendy urbanites, wasn’t resonating with the average Walmart shopper, a woman size 14 and five-foot-two, looking for comfort over couture. The tailored fits of Metro 7 felt out of place next to the roomy, reliable pieces from Faded Glory.

Sales could have been more active, and by mid-2006, Walmart found itself sitting on $2 billion worth of unsold apparel and home goods. The hard truth was becoming evident: Walmart’s reputation as the king of low prices was a double-edged sword. Shoppers turned to Walmart for bargains, not style.

The failure of Metro 7 was emblematic of Walmart’s broader struggle. Its brand, once its greatest strength, had become a constraint. Walmart was synonymous with savings but had yet to convince shoppers it could offer style alongside value. Meanwhile, Target continued to thrive, its “cheap chic” ethos capturing hearts and wallets.

For Walmart, the question loomed: how could it reinvent itself without alienating its core customers? It was a puzzle that would take more than a pair of trendy jeans. As the company grappled with these challenges, external forces, the financial crisis, rising consumer pressures, and the rapid evolution of e-commerce, would reshape the retail battlefield.

Walmart’s bid to conquer style may have stumbled, but its relentless drive ensured it wasn’t backing down. The war for retail supremacy was far from over.

Clicks, Code, and Checkout Chaos: Retail in the Digital Age

December 2013, Washington, D.C. The lines at Target’s checkout counters were buzzing with holiday shoppers. A woman in a festive sweater passed her card to the cashier, ready to pay for her haul of Christmas pyjamas and decorations. The transaction seemed routine, but something sinister was brewing. Deep within the checkout terminal, a tiny piece of malware was coming to life. This invisible thief, BlackPOS, silently cloned her card information and merged it with data stolen from millions of other transactions.

When her card was returned, her details had joined a torrent of stolen data streaming into Target’s central servers in Minneapolis. The hackers had infiltrated the system and devised a global route to cover their tracks. The stolen data zipped across international servers, from Florida to Brazil to Eastern Europe, before being sold on the dark web. It wasn’t until weeks later, just before Christmas, that Target executives realised the magnitude of the breach.

This wasn’t just a tech failure; it was a trust catastrophe. Over 40 million payment cards had been compromised, and tens of millions of customers’ details were now at risk. For Target, the breach was a defining moment, exposing vulnerabilities in its cybersecurity and its ability to safeguard its brand.

By January 2014, Target CEO Gregg Steinhafel faced mounting pressure. The data breach had decimated holiday sales and shaken customer confidence. In a conference room on the 32nd floor of Target’s headquarters, Steinhafel listened as his team delivered more grim news. The Secret Service had confirmed the breach extended beyond credit card information, names, phone numbers, and emails of up to 70 million customers had also been stolen.

“We have to go public,” Steinhafel insisted, dismissing cautious objections from some executives. Transparency, he believed, was the only way to rebuild trust. Within days, Target announced the breach’s expanded scope and offered affected customers free identity theft protection. But the move didn’t soothe the backlash. Headlines painted a picture of chaos, and sales continued to slump.

The fallout wasn’t confined to the press. Internally, the breach revealed deep cracks in Target’s operations. Investigators discovered that hackers had entered through an HVAC contractor’s network credentials, finding little resistance in Target’s poorly secured systems. Steinhafel’s leadership came under fire by March, and by May, he was out. The company needed a fresh vision from Brian Cornell, the first outsider to take the helm.

As Target wrestled with its crisis, Walmart saw an opportunity to reinforce its standing. Under CEO Doug McMillon, Walmart doubled down on its omnichannel strategy, leveraging its extensive store network to integrate online and physical shopping. One key experiment was Walmart Pickup Grocery, where customers could order groceries online and retrieve them curbside.

McMillon demonstrated the system himself during a media ride-along in 2015. “This fusion of online and offline offers unmatched convenience,” he explained as a Walmart employee loaded groceries into his car. Walmart’s strategy was clear: win the battle of convenience while extending its e-commerce capabilities to counter Amazon’s dominance.

The acquisition of Jet.com in 2016 signalled Walmart’s intent to become a digital powerhouse. Although costly at $3 billion, the deal brought in Jet.com founder Marc Lore, an e-commerce innovator tasked with revitalising Walmart’s online presence. Lore introduced free two-day shipping without a membership fee and expanded Walmart’s reach with trendy digital brands like Bonobos and ModCloth.

While Walmart chased Amazon in e-commerce, Brian Cornell focused on reenergising Target’s brand. One standout success was the launch of Cat & Jack, a children’s clothing line that replaced outdated labels and resonated with parents. Within its first year, Cat & Jack generated $2 billion in sales, proving that Target’s knack for blending style and affordability could still shine.

Cornell also championed a bold $7 billion investment to remodel stores and improve the shopping experience. Critics questioned the move, especially as the retail industry leaned heavily into digital. However, Cornell believed combining an upgraded physical presence with a strong online platform would set Target apart. By late 2017, the strategy was paying off. New store formats attracted shoppers with sleek layouts and convenient features like dedicated pickup areas for online orders.

When the COVID-19 pandemic struck in 2020, Target and Walmart found themselves at the forefront of a retail transformation. With millions of Americans staying home, demand for curbside pickup and home delivery soared. Walmart’s and Target’s digital investments proved prescient, enabling both companies to capture unprecedented market share.

Walmart leaned on its grocery dominance to weather economic uncertainty, while Target’s stylish yet practical offerings, paired with revamped stores, appealed to locked-down families. Both companies posted record-breaking sales, cementing their leadership in the industry.

Despite their successes, both giants faced post-pandemic hurdles. Overordering during supply chain disruptions left billions of dollars of excess inventory. Target, more reliant on discretionary spending, saw sharper profit declines than Walmart, whose grocery focus offered a buffer against economic shifts.

As the dust settled, the narrative was clear: Walmart and Target were no longer just retailers, they were ecosystems navigating a complex interplay of digital innovation, supply chain resilience, and customer trust. The question wasn’t just who would dominate the future of retail but how they would redefine it.

The Retail Divide: Understanding Walmart and Target’s Shoppers

It’s Sunday afternoon, and you’ve just realised you’re out of toilet paper. The question looms: do you make a quick Target run or head to Walmart for a restock? For millions of Americans, this decision has less to do with convenience and more to do with the distinct identities these two retail giants have carved out. Over the decades, Walmart and Target have evolved into cultural icons emblematic of shopping habits and social and economic divides.

On the surface, the stores seem interchangeable. Both offer sprawling aisles, competitive prices, and a vast selection of goods. But peel back the layers, and the differences become striking. Target is seen as the chic older sibling, stylish and aspirational. Walmart, on the other hand, carries the badge of blue-collar practicality. These perceptions aren’t just marketing quirks; they’re rooted in the companies’ DNA, shaped by their origins and customer demographics.

The divergence between Walmart and Target begins with their origin stories. Walmart sprang to life in the 1960s as an extension of Sam Walton’s five-and-dime stores, aiming to bring low prices to rural America. Its relentless cost-cutting and efficiency culture became a hallmark, attracting value-conscious shoppers. Meanwhile, Target emerged from the Dayton Hudson Corporation, a department store operator. From the start, Target infused its discount model with a touch of style and sophistication, an ethos that would later define its brand.

These foundations laid the groundwork for the companies’ respective identities. Walmart grew by focusing on ubiquity and necessity, expanding rapidly into groceries and essential goods. Target took a different path, prioritising design and fashion to create a retail experience that felt more curated and less transactional.

The differences in their shopper bases are equally pronounced. Walmart caters to a broad swath of America, but its core demographic skews toward middle- to lower-income households. Its appeal lies in its ability to provide low prices on everyday necessities, making it a staple in small towns and suburban neighbourhoods. Target, by contrast, attracts a slightly more affluent and urban clientele. Its stores are often situated in higher-income areas, and its merchandise is curated to include more style-oriented items like designer collaborations and unique home goods.

These contrasting strategies are evident in the shopping carts of their customers. You’re more likely to see groceries, diapers, and work boots at Walmart. At Target, the cart might include a mix of groceries, mid-range clothing, and that extra decorative pillow you didn’t know you needed but couldn’t resist.

One of the starkest distinctions between the two retailers is their grocery approach. Food is a cornerstone for Walmart, more than half of its revenue comes from grocery sales. This dominance is a direct result of its pivot to the supercenter format in the 1980s, which combined general merchandise with a full-service grocery store under one roof.

Target entered the grocery game much later and with less enthusiasm. While it has expanded its fresh food offerings, groceries still make up a smaller percentage of its revenue. The company has long debated the role of food in its stores, grappling with the category’s operational complexities and lower profit margins. Instead, Target has leaned into higher-margin items like clothing and home goods, which align better with its brand.

Despite their distinct customer bases, the line between Walmart and Target’s shoppers is blurring. Economic shifts, particularly rising inflation, have driven more high-income shoppers to Walmart for necessities. Walmart has seized this opportunity by launching marketing campaigns and improving its store aesthetics to retain these new customers.

Target, meanwhile, is working to broaden its appeal by emphasising value without compromising its stylish image. Initiatives like its Cat & Jack children’s clothing line and Hearth & Hand with Magnolia home goods have successfully bridged the gap between affordability and quality.

Both companies have embraced e-commerce as a vital frontier in their competition. By leveraging its extensive store network, Walmart has aggressively pursued online grocery delivery and curbside pickup, positioning itself as a hybrid of digital convenience and physical accessibility. Its 2016 acquisition of Jet.com and the subsequent integration of founder Marc Lore brought a fresh wave of innovation to Walmart’s e-commerce strategy.

Target has taken a more measured approach, integrating digital tools into its operations. Its Drive Up service, which allows customers to order online and pick up curbside, has been a runaway success, especially among busy parents. Unlike Walmart, Target emphasises seamlessness, avoiding separate e-commerce divisions to ensure that its online and in-store experiences are cohesive.

At the heart of the Walmart-Target rivalry lies the question of brand perception. Target has built a loyal following by creating an intentional and enjoyable shopping experience. It’s a place where customers might browse for inspiration as much as necessities. On the other hand, Walmart champions practicality and efficiency, catering to shoppers who value getting everything they need at the lowest possible price.

This dichotomy reflects broader societal dynamics. Walmart’s association with affordability sometimes draws criticism for perpetuating stereotypes about poverty, while Target’s more upscale image can feel exclusionary to some. Both brands must navigate these perceptions carefully to maintain relevance in an increasingly complex retail landscape.

As Walmart and Target continue to evolve, their paths remain distinct yet intertwined. Walmart is doubling its grocery dominance and exploring new revenue streams, such as health services and advertising, to reduce its reliance on razor-thin retail margins. Target is refining its brand with smaller urban stores and exclusive partnerships, staying true to its design-forward ethos while adapting to changing consumer behaviours.

The competition between these retail titans isn’t just about sales figures; it’s about identity, loyalty, and the shifting preferences of American shoppers. Whether you’re a Walmart regular or a devoted Target enthusiast, one thing is clear: both companies are shaping the future of retail in their image.

Corporate Clashes Series by Samuel H. Vance

‘Target and Walmart: The Battle for the Basket’ is a serialised extract from Samuel H. Vance’s Corporate Clashes series of books.

You can order Corporate Clashes on Amazon