Target to grow with new stores
May 28, 2001-- Home Textiles Today,
MINNEAPOLIS — Pleased with its performance last year considering the difficult economy, Target Corp. aims to strengthen its Target discount store base in both new and mature markets.
"The company's primary growth comes from new store expansion within our Target Stores division," said Bob Ulrich, chairman and ceo, at last week's annual meeting. The new units will swell Target 8 percent to 10 percent in net new square footage annually.
Additional Targets will be placed in less penetrated areas such as Boston, New York and Philadelphia, he said, as well as in more mature markets including Atlanta, Phoenix and Dallas, and in brand new ones, including its planned Portland, ME, store opening this fall. In addition, the purchase of 35 Montgomery Wards stores earlier this year are located in premier markets, such as California. The renovated Wards stores will open next year.
The company has also become more flexible in site selection and store design in recent years, Ulrich said.
The SuperTarget format will double its store count this year, as the company adds 30. "SuperTarget creates a convenient one-stop shopping experience for our guests," said Ulrich. "Additionally, it affords us the opportunity to replace older discount stores that have limited capacity for continued growth with our newest and biggest store format."
Speaking to reporters after the meeting, Ulrich added that despite the push in its supercenter format, Target discount stores are still being built because some locations do not accommodate SuperTargets. The SuperTarget format, however, does offer "good returns," he said, with an average transaction that is slightly higher than the rest of the chain.
Target's web site was also enhanced in the past year, he said at the meeting, resulting in expanded merchandise assortment and increased site speed and customer services, including the on-line introduction of the bridal and baby registries, called Club Wedd and Lullaby Club, respectively.
Ulrich also mentioned that Target is testing an in-store kiosk in one location, which allows customers to surf aol.com and target.com, though no other rollout plans were planned.
The Waverly home collection, bowed this spring, has had an "excellent start," said Gregg Steinhafel, president of Target Stores, after the annual meeting. The company plans to expand the program, in fact, possibly adding one more bedding and bath pattern next year. He wouldn't discuss other possible textiles expansions, though Ulrich added that decorative home furnishings, including textiles, are "a great, great strength for Target. It receives major emphasis from us, and will continue to receive major emphasis from us."
Though the meeting stressed Target stores, its other two divisions, Marshall Fields and Mervyns, still remain important as they contribute "to our overall strategy and financial performance," said Ulrich. This year, the Dayton's and Hudson's stores will begin their transition to the nameplate Marshall Field's, the most recognized brand of the three, a process which will be completed by the fall.
When asked about Kohl's competing with the Mervyn's stores, Ulrich commented that Kohl's is a "very successful; a good operation." However, Mervyn's and Kohl's already "co-exist quite well" in several markets." Ulrich said he didn't anticipate any problems. Mervyn's, in fact, will make "more significant progress this year," he added.
As for how Target competes with Wal-Mart, Ulrich said that it is "matching Wal-Mart's prices within pennies day to day...We have the best prices of anyone."
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