Target’s fourth quarter was not as strong as Brian Cornell and company would have liked, but the retailer did post its twenty-third straight quarterly same-store sales gains.
The retailer needed discounts to achieve its 0.7 comp gain even as traffic grew 2.1 percent. That experience, paired with the concern that inflation and other economic variables will continue to focus consumers’ attention on purchases of lower-price necessities, led Target to temper its expectations for 2023.
Mr. Cornell, speaking this week on a call with analysts, touted Target’s flexibility and core business strengths as reasons to believe that the retailer would continue to outpace the competition.
He pointed to Target’s continuing investments in private brands, store-within-a-store partnerships and customer loyalty as differentiating factors for the chain.
“We believe our commitment to newness is a key reason why we continue to generate traffic growth and why we drove broad unit share gains last year,” said Christina Hennington, Target executive vice president, chief growth officer.
“Our owned brands have long been a source of pride and differentiation for Target, offering great style and quality, all at incredible value. So, it’s no surprise that our owned brands have continued to outpace total enterprise growth and why we have plans to launch new or extend assortments in more than ten owned brands this year,” she said.
Target’s partnerships with Apple, Disney, Starbucks and Ulta Beauty have succeeded, and the chain continues to expand the store-within-a-store concepts.
“Last year’s sales from Ulta Beauty at Target were more than four times higher than in 2021, and this growth was almost entirely incremental,” said Ms. Hennington.
The retailer believes it is only scratching the surface of the potential of its Target Circle loyalty program. Circle members spent three times more than non-members during the holiday season.
“Whether searching for an item or browsing for inspiration, we continue to elevate their (Circle members) experience, providing personalized and relevant content using our incredible data and guest insights. This will include more customized home pages, improved search functionality, and even more personalized offers,” said Ms. Henington.