Rallying the troops on Black Friday morning, 2018 - Photo: RetailWire
Target was expected to be one of the winners of the 2018 holiday season, and the retailer not only lived up to expectations, it surpassed them.
Target posted a 5.3 percent gain in same-store sales during the fourth quarter as physical locations saw sales increase 2.9 percent while online jumped 31 percent. The 5.3 percent comp for the quarter was the biggest gain for the chain going back to 2004. Target has now had online sales increase 25 percent or more for five straight years.
Brian Cornell, Target CEO, speaking on the retailer’s fourth quarter earnings call, reflected that the most recent results came from investments made in 2017, with stores at its core.
“At that time, people were closing stores, not opening them. They were cutting costs, not investing in their teams, but we've never been a brand that falls in line with the crowd,” said Mr. Cornell (via Seeking Alpha). “Our guests aren't looking for a red and khaki version of someone else. They expect us to be different. They expect us to innovate and inspire. They expect us to be Target.”
Increasingly, Mr. Cornell, consumers are also expecting Target to be the place where they can buy what they want, where and when they want it. “Target is, hands down, America’s easiest place to shop,” he said.
Over the last two years, Mr. Cornell said, Target has remodeled 400 stores “outfitting them with new technology, fixtures, design, totally transforming how they look, feel and function.” Plans call for 600 stores to be updated by the end of next year.
Target has also found success with its small store format, with locations now numbering almost 100 and plans to open “a couple of dozen” new locations in cities and college campuses each year. The chain’s store in New York’s Herald Square, Mr. Cornell said, produces more sales per square foot than any store in Target’s entire chain.
“Our teams are obsessed with finding new ways to make our guests’ lives just a little easier. When you look at the results and pick your metric — traffic, comps, net promoter scores, guest surveys — it's clear our strategy is working.”
Target’s shares were up 4.58 percent on its earnings report.