Wal-Mart Stores, Inc. (WMT): Empty Shelves Equals Soft Sales

A better experience

On the other side of the spectrum is Target Corporation (NYSE:TGT) and Costco Wholesale Corporation (NASDAQ:COST). These companies have focused on creating a better customer experience. That includes such things as Target Corporation (NYSE:TGT)’s store design and Costco Wholesale Corporation (NASDAQ:COST)’s focus on happy employees. Wal-Mart Stores, Inc. (NYSE:WMT) tend to be cavernous and uninviting, and it has historically had a tense relationship with its employees.

To give a reference point, between 2009 and 2013, Target increased its store count by almost 100 stores, but also increased both its peak and non-peak hiring by nearly 10,000 employees. These companies, then, are set to benefit as disappointed Wal-Mart shoppers defect.

Solvable

It would be foolish to think that this is an unsolvable problem. Wal-Mart Stores, Inc. (NYSE:WMT) management will figure out how to get its shelves filled and improve customer satisfaction. And its everyday low prices will again draw customers once it does. However, with the company’s stock breaking out of its decade long trading range, the shares aren’t a particular bargain at present. And store level problems hitting the news isn’t a positive development.

Investors might find paying up for higher quality Target Corporation (NYSE:TGT) and Costco Wholesale Corporation (NASDAQ:COST) shares a better long-term option. Trading down to the Dollar stores might also be a good idea, but those concepts are more appropriate for aggressive investors.

The article Empty Shelves Equals Soft Sales originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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