The retailer reported a significant increase in sales in the first quarter of 2021, as well as an increase in consumer interest in its own brands.
Last year, the main sales driver for target there were online orders, the growth of which, due to the coronavirus pandemic, immediately jumped to 141%. At the same time, the growth of interest in the same day delivery service amounted to 90%. This year, as consumers gradually return to physical stores, 50%'s online sales have declined. However, this did not stop Target from setting a new record.
As it became known from the company's report, for the first quarter of 2021, sales increased by 22.9%, compared to the same period last year. At the same time, operating profit in the first quarter increased by 407% to $2.4 billion. It is noted that the growth was achieved mainly due to physical stores, on which the company's management made the main bet. As lockdowns are eased and vaccinations are introduced, shoppers are increasingly returning to their traditional way of shopping in physical stores.
Time has shown the correctness of the decision to invest in the development of a chain of stores - discover new, a variety of formats, update existing ones and improve the quality of service. As previously announced, Target plans to spend $4 billion annually on these issues. And this tactic is fully justified.
The report also highlights rising consumer interest in Target's own brands, which also gradually increases. For example, a sportswear brand All in Motion, introduced in January 2020, brought in over a billion dollars in its first year of existence. Aroused great interest among consumers and the recently presented brand Mondo Llama, under which goods for creativity are produced.
To date, it is this retailer that owns the largest number of own brandscompared to competitors such as Walmart and Amazon. Thus, according to the report of the Profitero platform, the share of food and beverages presented in the range of Target products, 27% is accounted for by its own brands. In the case of household chemicals, this share is 21%, while for health and beauty products it is 17%. At the same time, we can safely make the assumption that in the near future the number of retailers own brands will only increase.
Target representatives are very optimistic, rightly expecting that further vaccinations, a number of holidays and the beginning of the school year will contribute to an even greater increase in store attendance, and hence the setting of new sales records.