The days when Target owned exceptionally large retail space are long gone.
Target announced the opening of the 100th new small format store and the completion of the renovation of the 500th of the 1800 existing ones. Under a plan adopted back in 2017, the retailer has been aggressively opening small retail space near metro stations and college campuses. Considerable funds were also invested in the reconstruction of existing large stores, in which not only repairs were carried out with the replacement of floors, but also the design was updated and a food zone was added.
Today the size of a small Target store can be 1300 sq.m. As a result, the average area of the company's outlets is 3700 sq.m. or a third of the size of a full-size magazine. Experience has shown that smaller format stores are twice as efficient as larger ones.
The company also said it plans to open 30 small-format stores nationwide each year. However, there are opportunities for growth in cities such as New York, Los Angeles and Chicago. The company also plans to complete the reconstruction of another 300 stores by 2020.
According to COO John Mulligan, Target is “learning as we go.” So, before the company preferred to close outlets for the period of reconstruction. But practice has shown that consumers are not particularly concerned about repairs if they are carried out in separate areas of the store. In this way, Target was able to halve the “sales failure” that was inevitable during the full refurbishment, which took about 3 months.
Recently, the company published a financial report, which significantly exceeded analysts' expectations. While other retailers' revenues are falling, Target posted a 2.4% increase in sales, while online sales rose by 34%. Analysts believe that Target today more attractive to consumers because it serves as a reliable and versatile place to shop for essentials. On top of that, by opening new stores and redesigning old ones, Target is trying to improve its supply chain. Strong development led to the growth of the company's shares, the price of which increased by 55% this year.
Also, another news was the collaboration between Target and Disney. According to the signed agreement, zones for Disney products will appear in Target stores. Their opening will begin on October 4 this year and will initially cover 25 stores across the United States. Next year, such zones will appear in another 40 stores. Sales Disney merchandise will begin soon in the Target online store. It is expected that such a move will serve to attract additional customers.
Simultaneously, in 2021, Target will open a retail location near the Walt Disney World Resort in Orlando, Florida.