Internet, shminternet: Target adds, renovates stores as money pours in
Physical locations give retailer an “incredible advantage,” executive says
Target has hit the bullseye.
The big box retailer is adding and renovating stores as well as warehouses as it thrives in the competition with Amazon and other internet retailers.
The moves stem in part from Target’s stellar year: Its 2020 sales growth of more than $15 billion was greater than in the prior 11 years combined, the company announced Tuesday. Total revenue for the fourth quarter increased 21 percent to $28.3 billion.
The retailer this year plans to open a warehouse in New Jersey and another outside Chicago staffed by robots, similar to micro fulfillment centers recently announced by Walmart.
If the first one works out, Target expects to open five others this year.
Target will also renovate 150 stores this year — a plan that was paused when the pandemic hit. The Minnesota-based retailer did renovate two dozen stores and complete 29 small format stores last year, and plans to open 30 to 40 new stores annually, continuing a plan announced earlier this year.
Target ended 2020 with 1,897 locations, up from 1,868 in February 2020. While Amazon pursues an almost entirely online strategy and big-box retailers such as Best Buy reduce their real estate footprints as internet sales increase, Target believes stores help connect it with customers.
“The stores give us an incredible advantage” said Michael Fiddelke, executive vice president and chief financial officer, during an earnings call Tuesday.