Black Friday battles: Why Walmart is still thumping Target

WMT -0.38% TGT -1.79% AMZN +2.05% KO -1.19%

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I really have no good explanations this week for why Walmart (WMT) continues to kick Target's (TGT) teeth in, operationally speaking.

Wall Street people I've spoken with about this quarter just crunched some numbers for their models and noted that Walmart is taking market share. Borderline useless to me.

My nearly 65,000 followers on X and LinkedIn gave me better insight — with a side of sass. I appreciated it.

But when push came to shove, the most eloquent answer came from Walmart CFO John David Rainey to me on Yahoo Finance (video above).

I asked him point-blank why Walmart is shredding Target. While he didn't mention Target by name — a no-no within old companies like Walmart and Coca-Cola (KO) — what he said made a lot of sense.

"I think there's historically this notion that maybe there's a trade-off between value and convenience," Rainey said. "And I think at Walmart, that's a bit of a false choice. We can provide both of those, and we're demonstrating that. And that's one of the reasons that we're gaining so much [market] share."

Rainey noted that consumers have been seeking value for the past couple of quarters. "It stands to reason if times are getting more difficult or budgets are being strained more, you're only going to become more choiceful, more value seeking," Rainey said. "And so, customers we see are looking to do business with companies that provide that value, that give them the convenience that they've come to know and expect. That's why we are consistently executing well."

Therein lies the problem for Target as it attempts to have a better 2026 than 2025 while new CEO Michael Fiddelke slides in.

Walmart — by way of 4,700-plus US stores — is regularly delivering orders to people's houses in less than 30 minutes. By year-end, Walmart's US stores will be within a three-hour reach of 95% of the population. Walmart has leveraged its mighty financial position to invest aggressively in its supply chain, allowing it to be a more trusted destination for shoppers than Target.

Couple that with a significantly expanded e-commerce assortment and a low-price commitment, and you have Walmart a country mile ahead of Target in meeting customers with how they shop nowadays.

To be fair, Amazon (AMZN) is doing this too — I was blown away by Amazon's supply chain projects when I caught up with CEO Andy Jassy a few months ago in New York City. There are real structural reasons why it feels like your Amazon package is showing up faster than ever before — and it's more than robots.

All of this explains why Target announced this week that it will increase its capital expenditures by 25% next year. It called out a lot of investments to spruce up stores. But let me tell you — if Target doesn't invest a huge chunk in its supply chain to improve shipping times and online shopping, then 2026 will be financially disastrous again.

Honestly, I'm not even sure if Target could close the competitive gap with Walmart at this point, but I wish them well in their pursuit.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].

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