Target Corporation (NYSE:TGT) recently revealed that it will be keeping some of its stores open until midnight. While some on the Street have welcomed this move by Target Corporation (NYSE:TGT), others have rubbished it as a desperate measure. With this move, Target Corporation (NYSE:TGT) has opened the gates for other retailers to follow suit, but will this strategy work out? That was the topic of discussion between Chad Morganlander, Portfolio Manager at Stifel Nicolaus and Scott Martin, Chief Market Strategist at United Advisors on Fox Business on Monday.
“It perhaps is a positive move, they are contending with some pretty difficult issues as well as Wal-Mart, the consumer is somewhat lackluster and it’s a bumpy ride in regard to consumption and therein lies the problem that Target Corporation (NYSE:TGT) is having as well as Wal-Mart, we believe that over an extended period of time, 12, 18, 24 months consumption patterns are going to pick up here in the United States,” Morganlander said.
The retail industry as a whole is facing tough times with stagnant sales and reducing margins, the only retailers that are somehow less affected by this seem to be either the online ones or those who cater to a niche or luxurious segments. Morganlander believes that consumption in aggregate has not been good as it is tied to things like employment and wage growth, which in itself is improving, but hasn’t changed significantly. Martin feels that the move by Target Corporation (NYSE:TGT) is not good and even the online arm of the company is not doing well.
“[...] The problem is, if you are in retail, there is just no margins there. The consumer, You, are discerning, you are taking your time, you are finding the best deals out there and so those margins, if you a retailer just aren’t present [...],” Martin added.