Shopping for electronics and books may be moving online, but we’ll always have the large superstores gracing our highways. Stores such as Wal-Mart Stores, Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), and Costco Wholesale Corporation(NASDAQ:COST) fight every day to earn our grocery dollars, and hopefully sell some electronics or clothes along the way.
Wal-Mart, Target, and Costco are three of the biggest retailers in the world. All three operate within the United States and all three manage to span outside of the nation’s borders (Target is about to open stores in Canada, Wal-Mart and Costco are already worldwide). The question we must ask as investors is if expansion can continue and if profits will continue to grow, even if the expansion is done.
Tale of the Tape
|EPS Growth 5YR||9.52%||8.87%||7.65%|
It becomes quite clear that Wal-Mart is the largest of these three commerce giants, and also has the best EPS growth over the last five years, but they are likely struggling to find new markets to take over. I would like to think that the U.S. market is pretty saturated, and the Canadian market is too. Let’s delve further into each company to find their merits and weaknesses.
As I mentioned, it is the biggest. They are all over North America and have fully saturated the UK market with their Asda stores. The company is also a prominent retailer in Japan, India, Mexico, China, and South America. Overall, the company has some 8,500 stores spread across 15 different nations that operate under 55 different names.
So, is there room to grow? I’m not too sure. I think that the growth prospects are definitely limited for Wal-Mart right now. The company has tried in the past to expand into nations such as Germany and South Korea, but both attempts proved to be unsuccessful. There are still plenty of untapped markets for the company, they just have to look for dense populations and a willingness for people to change up their shopping habits.
Target, as it’s currently known, was formed in 2000 via numerous mergers and acquisitions. The company’s history takes it all the way back to 1902. Over the century Target has grown to over 1,800 stores around the United States, and expansion is underway to bring this company into Canada.
On the personal side of things I’d have to say that Target has a clean, more welcoming feeling to it than Wal-Mart. This could prove to be a key in the retail battle that is brewing in the United States.
I do believe that Target will continue to grow here in the U.S., in Canada, and eventually in Europe. I don’t believe that it will be on the same level as Wal-Mart any time in the near future, though. Things like that take time, but if you’re investing over the long term, you have time! Target may be worth a further look.