21 New Stores on Target - Analyst Blog

Target Corporation (TGT">TGT), the operator of general merchandise and food discount stores in the United States, recently unveiled its plan to open 21 stores in 12 states, in order to become a one-shop stop for the buyers.

Minneapolis, Minnesota, based company, Target, hinted that it plans to open six stores on March 6, 2011, in California, Colorado, Minnesota, Wisconsin, Kentucky and Massachusetts. On July 24, it plans to open 9 stores - 2 each in California and Pennsylvania, and 1 store each in Hawaii, Arizona, Oklahoma, Louisiana and Massachusetts.

Target notified that it plans to open the  remaining six stores on October 9 with 2 stores each in California and North Carolina, and 1 store each in Ohio and Pennsylvania.

The company informed that the new stores with expanded fresh food assortment will be about 135,000 square feet in size, and will employ 100 to 250 people.

Target said that the new SuperTarget store in Woodbury, Minnesota, will be in line with supermarkets, and will also have all the facilities of a general merchandise store. The store will be spread out on an area of approximately 174,000 square feet, and employ 200 to 300 people.

Going forward the company will focus more on store renovations and improving store sales productivity. Target in fiscal 2011 plans to remodel nearly 380 stores, which include an expanded grocery offering, improved store layout, and enhancement of in-store shopping experience across departments, such as, beauty, home, electronics and video games, aimed at increasing traffic.

Moreover, by the end of 2011, Target plans to introduce P-fresh in-store food and grocery sections in approximately 850 discount stores. The company expects P-fresh to boost 2011 comparable-store sales by 1% to 2%.

Target's efficient marketing, multi-channel strategy, product innovation, compelling pricing strategy, and new merchandise assortments, should help drive comparable-store sales and operating margins in the long term. We expect the company to gain market share, and believe that more focus on consumable items should boost sales and earnings in a sluggish consumer environment.

Target, which currently operates 1,752 stores in 49 states, faces stiff competition from Wal-Mart Stores Inc. (WMT">WMT). Currently, we have a Neutral rating on the stock. Moreover, Target holds a Zacks #3 Rank, which translates into a short-term ‘Hold' rating, and correlates with our long-term recommendation.

 
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