By coinnews 
00:00 Speaker A
Let’s talk about Target here specifically because um obviously there’s a lot of concern about it being able to turn itself around here. What do you think?
00:16 Jerry Storch
Well, I think that this is a broken story. Uh they’re they’re operating in a way that uh is off strategy. They’re not who they’re supposed to be if you will and who they’ve always been. And meanwhile, uh they’re not executing well. Other than that, everything’s great. Meanwhile, Walmart is firing on all cylinders, uh continuing to reinforce their low price position and executing uh beautifully.
01:04 Brian Sozzi
Jerry, you think about some of your own services as vice chair of Target in the past, to the extent that you still have the pulse of those who are still on the board of directors here, what are they discussing right now? What are they thinking of Brian Cornell and the leadership?
01:42 Jerry Storch
Look, I can’t speculate as to what the board uh might be thinking about. I can walk into the stores though and see uh there’s a lot wrong with the business right now. And it’s kind of been a a string of uh I I hate to use this word, but of excuses that they’ve given on their earnings calls for many, many, many quarters now starting from the pandemic till now. Uh you know, they they were talking all the time about retail theft and what a big problem that was, and that’s a real problem, but it affects everyone. And uh it doesn’t affect them uniquely if they have been performing uniquely poorly. Uh similarly, you know, they they uh have had this distraction related to uh DEI where first they were in trouble for going too far and now they’re in trouble because they pulled back. And uh again, I’m sure that affects their business somewhat, but it’s not what’s wrong at the core of the of the business. So it’s it’s you know, the consumer stressed, of course the consumer stressed, but that doesn’t seem to bother Walmart’s consumer, they seem to be doing just great. So essentially, uh you know, Target as they sit right now is just not Target. I mean their prices are too high. Uh they’re high low all the time with with all these offers and buy one, get one or get a discount or get a gift card. A loyalty program that saps the low price position because you only get the best price when you’re on sale. Uh the stores are are not clean like they used to be. There’s uh fixtures intentionally in the aisle, which would have been grounds for dismissal if you went to visit a store, saw something the the aisle in the passage. It’s just not Target right now.
04:11 Speaker A
What can Target, um what lessons can Target maybe learn from what Walmart has been doing correctly over the past few years?
04:26 Jerry Storch
Well, you have to be who you are and they’re not they’re not exactly the same even though we have a tendency to as if they are. They’re both discounters, but Walmart the low price discounter. For Target to succeed, they have to differentiate themselves from Walmart. They can’t look like Walmart when you walk inside, and right now they just look too much like Walmart. I mean, while the prices are higher. So what’s the point? And I think that’s what the consumer is feeling. They’re still, you know, have some some wins now and then where they do a collaboration with Taylor Swift or with a designer or that kind of thing. But those things are really, really tiny, you know, in the scheme of the absolute absolute business. There’s some fundamental strategic issues beyond that. Uh, you know, uh uh they have de-emphasized grocery relative to the rest of their business when you compare uh Walmart who’s the world’s largest grocer. And so grocery drives frequency. Consumable products drive frequency. And uh Target Target has been relying very heavily on nice to have products, but not must have products, and that has been absolutely incorrect in this environment. But this environment is lasting for years. And so uh you can’t you eventually have to deal with it. So so fundamental business issues are at the core of what’s going on here, and they have to take ownership of that and uh and and fix it. And so it starts with what’s the strategy? Who are we? And then once you have that, which I think is pretty clear because it’s only been clear for like 50 years, so why would you change it? Then it’s then it’s, you know, how do we execute against that, which they’re not doing either. I mean there’s lines, lines to check out. It was always the fastest checkout that you could get uh at Target. Their out of stocks are too high. You know, there’s just serious business issues right now.
07:35 Brian Sozzi
Sure.