26 Nov 2006 2317H

Wal-Mart sales fall, first time in 10 years

says the Financial Express. I wonder if it’s because people are trading up, to quote Michael Silverstein (I’m reading Treasure Hunt right now, which explains the other half of the trade-off). By that, I mean that the numbers are being reflected in JCPenney’s reviving fortunes. It’s a kind of trading up, not necessarily to Tiffany and Williams Sonoma, but to the next tier up. Howard Davidowitz, my favorite retail analyst, would howl with derision, I know: discounters are increasing their market share hand over fist (or hand over hand, but who says that nowadays, even if that’s what they mean?) over department stores. Now, Penney’s is doing better than Wal-Mart in fashion, but will still feel pressure from Target, which is still a discounter but being a design-driven company, holds a distinct edge over Wal-Mart in fashion. People now recognize Target as a design leader in retail; Penney’s has to shake off a lot of old baggage with the brand. It’s starting to happen but it’s not going to happen overnight and will require a lot of feeding. Once again, companies that value design will see that investment pay off in dividends.

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26 Nov 2006 2327H

tim writes:

I used to think of Penney’s as the crappies of the crap…like even lower than Wards. I’m not sure there’s space for them in the retail arena…then again, HP has been staging a comeback.

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