Fifty years ago this month, the first Target store opened for business.

Two months later, so did the world's first Wal-Mart.

Together, they transformed how America shopped. The sites of those original stores -- Target in the St. Paul suburb of Roseville, Wal-Mart in the rural community of Rogers, Ark. -- would come to define each retailer, even half a century later.

Target was the creation of Minnesota's Dayton family, whose Minneapolis-based department stores were known for style and sophistication. When the Dayton brothers decided to experiment with a discount format, they positioned Target as a better breed of discount store, hoping to appeal to suburban Minnesotans.

Oct. 2, 1967: L-R: John Geisse, senior vice president, Douglas J. Dayton, president and Clayton Burkstrand, new store manager. In the background are 26

"Here's news for people whose taste runs to the better things in life," Target announced in its inaugural ad in May 1962. "A new kind of discount store for people who demand and understand quality ... (offering) better lines of everything from groceries to high fashion. And all at EVERYDAY DISCOUNT PRICES."

Wal-Mart's great appeal was offering the lowest prices. Its early stores had a more down-home feel and drew from Arkansas' small towns and rural areas.

"Wal-Mart was founded on a principle that at the time was really radical -- you'll get the fairest price and there won't be any shenanigans or pricing games, like playing high-low with promotions," said Carol Spieckerman, a retail analyst based in Wal-Mart's hometown of Bentonville, Ark. "Back then, retailers notoriously brought in everything at a very high price, then continued to mark them down."

Today, Target and Wal-Mart are both industry giants. As its 50th birthday nears, Wal-Mart straddles the globe, with more than 8,500 stores in North America, Asia, Europe, South America and Africa.

Target now has 1,700 stores with locations in every U.S. state except Vermont. It has 365,000 employees. And next year, it will open its first stores in Canada.

Low prices are advertised in 2010 at a Target store in Mountain View, Calif. (Associated Press)

Yet for all their growth and evolution, the differing DNA of the two discounters was recognizable from their first stores in 1962. Then and now, Wal-Mart promotes rock-bottom prices that appeal to less-affluent shoppers. Then and now, Target woos the middle class with a mix of discount prices, name brands and attention to the niceties.

Stan Pohmer, a Twin Cities retail analyst, was once a senior buyer at Target, where he saw the passion for detail.

"The cleanliness of the store, the openness of the aisles, the greater level of customer service, that community orientation -- all those things became important, and a lot of those things are because they came out of the department-store industry, as opposed to the variety-store industry."

The grocery checkout at Target&#8217;s original Roseville store, December 1962. (Pioneer Press files)
The grocery checkout at Target's original Roseville store, December 1962. (Pioneer Press files)

Target's customers poked fun at the discounter, giving it a French pronunciation: Tar-zhay. But from the beginning, the aspirations of Target's middle-class customers would shape its destiny.

"You look at the demographics of the Twin Cities and Denver (Target's second market), their demographics are considerably higher than in backwoods Arkansas," Pohmer said. "Wal-Mart carried a more rural assortment, and they were very focused on price. They didn't carry the higher end, as Target did."

Today, Target's presence in the Twin Cities is everywhere: its corporate workforce, 11,000 strong; its long record of charitable giving; the large marketing/advertising/vendor community that serves the retailer; its name affixed to venues like Target Field, and most of all, the 74 Minnesota stores that dominate this market.

"The community responsiveness to Target has been huge," Pohmer said. "People are willing to spend a little bit more to go to Target, because it's a local institution, and they do business on a little different level."

Critics have long attacked Wal-Mart's anti-union policies, while Target's have drawn much less flack.

"I think it's because Wal-Mart's size is incredible, their behavior has always been more arrogant and they've been cheap," said Bernie Hesse of UFCW Local 789. "Whereas Target was (tied to) Dayton's ... Target was always good at community involvement. That's great -- but why not pay your folks a good wage?"


Target&#8217;s downtown Minneapolis store, a two-story outset, was the first of its kind in the Midwest. (Pioneer Press files)

It seems strange now, but once, being a national discount chain was against the law. During the Great Depression, dozens of states passed "fair trade" laws, making it illegal to sell goods below a manufacturer's set price. The goal was to block national retailers from undercutting local merchants. By some accounts, 45 of the 48 states passed such laws, including Minnesota.

But after World War II, those laws were struck down or repealed. A flurry of discount stores arose in response, noted David Brennan, a retailing specialist at the University of St. Thomas.

"Wal-Mart, Target and Kmart all started in 1962," Brennan said, "but what was happening in the decade before that was discounters had gotten traction -- not only with consumers but also with suppliers, and that had a tremendous impact."

The early discount stores were typically no-frills outlets with low prices, scant service and low-end merchandise. But they filled a need for budget-minded shoppers.

"You had stores like Zayre's Shoppers City, GEM and some others eating away at Dayton's market share," Brennan said. "So Dayton's made a decision: If you can't lick 'em, join 'em."

It did raise eyebrows when the Daytons entered the low-margin discount business. But Tony Jahn, Target's corporate historian, said the Daytons were looking ahead.

"They recognized that America was shifting; we were becoming a much more suburban country," he said. "We knew that to be a really great retailer, we had to be where our customers were. ...(So they asked) what kind of retail entities can help us get there?"

Jahn said the Daytons created Target to be different, with "high quality, high style, we added the low-discount-price element to it, injected fun and newness ... brands that people can trust, national brands."

For the initial test, the Daytons planned to build four stores in Minnesota: St. Paul, Crystal, St. Louis Park and Duluth.

But the chosen St. Paul location, on Rice Street, fell through. So the Daytons purchased a partly finished structure in Roseville at Snelling and Minnesota 36, completed the building, then opened Target's doors May 2, 1962.


That first Target store had 75 departments, including a grocery store, operated under lease by Applebaum's.

"There used to be a dry cleaners in there," one of Target's first employees, Audrey Anne Russell, told the Pioneer Press in 2010. "There was a shoe department where you sat down, and they got shoes in the back room. There was even a hat department. They had some of the accessories, like gloves, behind the counter."

Times have changed. The wig department is gone. Tires, too. Yet the DNA of today's Target is easily recognizable.

A spacious stand-alone store. A wide range of name-brand goods. A drive for low prices. An emphasis on do-it-yourself shopping. The bull's-eye. A nonunion workforce with many women and younger employees. And crowds of shoppers.

"It was a very busy store, with an incredible amount of traffic," Russell said of the Roseville store.

Yet Target was hardly an overnight success. Those early stores lost money at first before turning profitable in 1965.

In the meantime, nearly every major U.S. retailer was leaping into the discount-store game, including Kresge's with Kmart, Woolworth's with Woolco and J.C. Penney with Treasure Island.

Those competitors eventually had an unexpected impact. During the later waves of consolidation, Target was able to expand into new territory, often by buying up its rivals' stores.


"Kmart was the one that expanded like crazy at the very beginning," Pohmer remembers. "They went national almost instantly, whereas Target and Wal-Mart were still trying to feel their way."

The Daytons had reason to be cautious. Target was just one element of the Dayton Hudson Corp., which had department stores, shopping centers and more.

"I'm not going to say they were the redheaded stepchild, but the parent company really focused on Dayton Hudson (department stores)," Pohmer said. "Target was sort of a side business for them."

Target's first expansion outside Minnesota came in Denver, then in metro markets like Dallas, Kansas City and Houston. Target preferred to grow one market at a time, buying stores of its rivals.

"They had a file on every other major retailer, in the event the chain came into play," Pohmer said. "They already knew how many stores, the condition of its stores."

In time, a new breed of executive took the reins at Target, from outside the department-store mold, and the pace sped up.

When Pohmer joined Target in 1983, "they had just started their aggressive expansion, on new store growth and acquisitions, and you didn't walk -- you ran. It was just an incredible time to be there."

Then Target ran into a new obstacle: Wal-Mart.

The Arkansas discounter wasn't just in the South anymore, and it dwarfed Target in stores and revenues.

"Way back when, Target and Wal-Mart didn't compete head to head, so you didn't have to worry much about the other guy," Pohmer said. "But when they started expanding and sharing markets, then you had to find your niche."

Target's niche came into sharper focus in 1987, Jahn, the historian said.


"We wanted to be known as a discount retail operation, but we knew from our department-store heritage that we could be better, we could be more. ... So we began to differentiate the brand, in terms of stores, merchandize, ... giving us a unique niche, as America's upscale discount retailer."

The philosophy was later crystallized in Target's slogan: Expect more, pay less. In time, it led to a partnership with designer Michael Graves, then other big-name designers.

Target returned to its Roseville origins in other ways. Groceries were part of its first Target store but were later dropped. When Wal-Mart became a grocery powerhouse, Target revived the concept -- first with some packaged foods, then introducing SuperTarget stores, finally adding fresh food to all its stores.

"I think Wal-Mart certainly was the inspiration for Target doubling down on grocery," Spieckerman said.

As Target grew, so did its prominence within Dayton Hudson. In 2000, the company was renamed Target Corp. Finally in 2005, the department stores were sold off. Target, that side business, had survived and thrived.



See Target's geographic expansion at http://projects.flowingdata.com/target and Wal-Mart's at http://projects.flowingdata.com/walmart.