I was just thinking about this. It is clear that Walmart's clientele is different than Target's. My curiosity is around why that would be. When I've visited Walmarts in upscale neighborhoods, there is generally a Target within a few miles. The difference in culture from the surrounding neighborhood is so huge that I wonder if they bus in the people to go to Walmart. Most major retailers have loss prevention departments. Their job is to find ways to prevent theft. Based on the article, Walmart is not employing very many of these techniques. In a colloquial sense, that's inviting crime. If someone leaves their door open and announces they're going on vacation, they're inviting crime. By not employing effective loss prevention techniques and using the police as their crime prevention, Walmart is inviting crime. It may make sense to Walmart's culture to operate this way, but I'm not convinced that it makes financial sense. For all the hours that it takes a police officer to respond to a theft, it also takes a Walmart employee's time to deal with the incident. That employee gets paid for that time. If the police hours are that high, then the Walmart employee hours are high as well. If Walmart used that money that they would have used to pay those employees, they could pay a loss prevention consultant team to find ways to reduce the theft or pay a security company to patrol. I don't know what you think I believe about the bottom line. I did read the $15B profit figure. Would it have been more or less than that figure if there was a good loss prevention plan in place? In my comparison of Target and Walmart, I was looking at the article linked in my comment that stated that in the first quarter of 2015, the net income margin was 3.7% for Target vs. 2.9% for Walmart. For the same time period, revenue growth for Target was .4% while Walmart's revenue growth was negative .1%.
Oops, I wasn't clear. This part: I don't either. It's a difference between micro and macro price margins, but the dichotomy is false. Anyway, I would chalk most of the clientele difference to Walmart's reputation. It may not actually be cheaper (though it is, often, cheaper than everything except Costco), and most of the calls may not actually come at 2am, but nonetheless its hours and perceived prices contribute to it seeming like the 'trashier' big box store. Can you imagine someone mixing meth in the bathroom of a Target? Target is also committed to customer service in a way that Walmart isn't, of course. Maybe. But the people who run Walmart right now are some of the most successful businessmen and women who ever lived. And as far as loss prevention goes, it's just as easy to shoplift from Target as it is from Walmart.I don't know what you think I believe about the bottom line.
I don't buy the idea that Walmart's margins are so thin that the store has to prosecute petty theft...
It may make sense to Walmart's culture to operate this way, but I'm not convinced that it makes financial sense. For all the hours that it takes a police officer to respond to a theft, it also takes a Walmart employee's time to deal with the incident. That employee gets paid for that time. If the police hours are that high, then the Walmart employee hours are high as well. If Walmart used that money that they would have used to pay those employees, they could pay a loss prevention consultant team to find ways to reduce the theft or pay a security company to patrol.
Chicago woman charged in Target washroom blastCan you imagine someone mixing meth in the bathroom of a Target?
Police Cmdr. Joseph Dugan says evidence recovered from the scene indicates Heidi E. Schmidt of 4049 W. Crystal was in a bathroom stall mixing items commonly used to produce a chemical high when the unstable mixture exploded.