Wal-Mart’s Future: Will It Become Engine Of the U.S. Economy

Wal-Mart’s SuperCenters have become modern-day Main Streets, with all the requisite stores and services of a downtown shopping district.

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Target’s Super Target stores are becoming increasingly gentrified. If a coffee bar is a sign of a neighborhood’s upward mobility, then Target is movin’ on up. The chain is bringing to its stores Starbucks stands, those harbingers of rent increases and Gap units. Only at Target, Starbucks gives the chain a caffeine-powered hit of cachet.

A new advertising campaign for Isaac Mizrahi’s apparel collection for Target carries the tag line: “Where does New York’s 5th Avenue meet Main Street, USA? Isaac Mizrahi at Target. Luxury for Every Woman Everywhere.” The company in September will open a temporary store at Rockefeller Center here to sell Mizrahi’s line.

Some Target ads and billboards feature model Shalom Harlow, who starred in Mizrahi ad campaigns when he was designing luxury clothes at luxury prices. Of course, Target sells other products aimed at thrifty design snobs such as Michael Graves custom outdoor pavilions and $1,699 Weber grills.

A Wal-Mart spokesman said the chain is also taking many of its cues from the class rather than mass arena. In Pell City, Ala., an example of the ever-evolving SuperCenter, features skylights as part of an indoor lighting system and fixtures similar to those used by specialty stores, cutting down on the harsh fluorescent lighting that makes shoppers feel like suspects undergoing a police interrogation.

The company is catering to more sophisticated apparel consumers with George, a line Wal-Mart inherited when it bought the U.K. supermarket chain Asda. As reported, freestanding stores for the apparel brand are on trial in the U.K. (See story, opposite page.)

“Wal-Mart already owns the low-income shopper and is now increasing its penetration among middle-market families,” Huff said.

On the other hand, Wal-Mart isn’t forsaking its core customer. A dollar-store format is being tested in 17 stores in the U.S., the spokesman said.

There’s evidence that more affluent consumers are buying into the low-price, no-frills world of dollar stores. “Dollar stores have penetrated the middle-income customer and are starting to penetrate upper-income shoppers with households that have three or four children,” said Candace Corlett, a partner in WSL Strategic Retail. “They’ve made enormous inroads. The dollar stores are a threat to Wal-Mart. They’ll never have the selection of a Wal-Mart, but part of their charm is that it’s very easy to get in and out quickly.”
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