Market Hit: Leveraging CE Data to Understand the Differences between Target and Walmart by Income Cohort

General merchandise retailer Target Corporation (TGT) recently reported revenue growth of -4.9%, close to CE Implied Reported growth of -4.8%, and lower than consensus of -1.7%.

Target Total Sales Growth Year Over Year

For the online segment, TGT reported revenue growth of -10.3%, close to CE Implied Reported growth of -12.0%.

Target Total Online Sales Growth Year Over Year

Management cited macro challenges such as the rollback of stimulus payments, end of child tax credits, and student loan repayments as key drivers of the weakness. Interestingly, WMT management cited those same challenges, but reported increased spend across all income cohorts. CE data reveals that Target is underperforming Walmart across income groups, but the most pronounced difference is in the <40k cohort, as the group feeling outsized pressure from macro challenges is turning to Walmart to manage spending.

Difference in Target vs Walmart Spend Via Income

The phenomenon is even more pronounced in the online segment, with Target recently reporting a decline in sales compared to Walmart U.S. e-commerce growth of 24%. 

Difference in Target vs Walmart Online Spend via Income

Consumer Edge is the leading provider of alternative data for consumer spending behavior, and the only provider of global revenue signals. If you’d like to benefit from using Transact US or other products for restaurants, retail, and other industry data year-round to track trends and dynamics like these, reach out to insights@consumeredge.com.

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.