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Target general overview
On the whole, the national retail scene appears
to be enjoying healthy gains and steady projections as spring
unfolds. This is the fourth straight month of gains at the
retail level and analysts believe that the new flood of
bright fashions has much to do with the upswing. A number
of retailers, including Target Corp., Penney and Federated
Department Stores Inc. raised their first-quarter profit
outlooks, noting that consumers were buying at full-price
rather than waiting for markdowns.
"The month is the strongest of the year so far, and
I suspect that it will be the strongest performance for
the whole year as well," said Michael P. Niemira, chief
economist at the International Council of Shopping Centers.
But retailers face potential problems in the months ahead,
among them rising gasoline prices and lingering job weakness,
that could stall their momentum, Niemira said Niemira added
that warmer weather helped retailers earlier in the month,
although sales decelerated in the last week when temperatures
fell.
In the five weeks ended April 3, 2004 compared to the five-week
period ended April 5, 2003. Comparable store sales for the
total Target corporation increased 7.3 percent in March.
Comparable store sales by division reflected an increase
of 7.8 percent at Target Stores. Bob Ulrich, chairman and
CEO of Target Corporation, is quoted in a news release as
saying, “Sales for the corporation continued to be
above plan in March. In light of our actual sales performance
in February and March and our outlook for April, we expect
to outperform the current First Call median EPS estimate
of 45 cents in the first quarter.”
At Target, the top performing merchandise categories during
March included entertainment, stationery/holiday, shoes
and toys. Home décor, intimate/hosiery, electronics
and sporting goods delivered the softest comparable store
sales for the month. Target’s strongest markets during
March included Rhode Island, Maine, South Dakota, Nevada,
Washington and Connecticut. Mississippi, Nebraska and Delaware
were among our weakest-performing markets for the month.
Target Corp. expects April same-store sales to be in line
with its plan, based on sales last week and the retailer's
expectation for the remainder of the month. Target's plan
calls for a 4.5% to 6.5% rise in company-wide April same-store
sales, which includes results from its namesake chain and
the Mervyn's and Marshall Field's department stores. The
company expects same-store sales at Target stores to increase
5% to 7% for the month. Target said the relative strength
and weaknesses among merchandise reflected the earlier timing
of Easter and should normalize in later weeks.
Store wide, the ‘Want versus Need’ strategy is
still in full swing. The idea plays up Target’s ability
to lure the ‘need’ customers to buy the things
that they really ‘want’. All humor aside, the
‘need’ items are always great core pieces at prices
that rival Wal-mart’s every day low pricing system
and that are superior both in make and in styling. The advantage
that Target is playing up is that when a consumer has satisfied
all of his or her ‘needs’, they still have money
left over and they can usually find something that they
really ‘want’ to spend their money on!
Toddler and infant department overview
The big kids on the block here are Genuine Kids by
Osh Kosh, Cherokee, Tykes by Carters, Circo, Lullaby Classics
and Pooh Classics. The floor is (in most locations we have
visited) split up with sportswear, sleepers and creepers
on the floor and layette on a wall tucked in with the every
day baby supplies. Tykes has a great strategy in amongst
all this in that they are on the floor in sportswear, on
the wall in Layette and they also have a seasonal/ ‘oh
I just have to get this’ sub grouping in the baby bath
area. This time out they capitalized on the ‘Duckie’theme
that they have made so popular in their Carter’s line
and that is perfect for Easter time. The real star on the
floor though is Circo. This is the opening price point ‘Need’
items. The prices here are on the heels of those at Wal-mart
but the styling is just so much richer at this time. Also,
for the bargain style shoppers, there is a choice. The looks
by Circo are often close to those by Cherokee but are priced
at around $2 less. In Layette, Tykes covers all of the bases
with twin packages (two tops, two pants, two creepers) and
mixes them in with multi pack towels, wash cloths, bonnets
and booties.
Opportunities in the infant's
and toddler's department
Target has done an enviable job positioning its brands
and offering diverse product on its floor. The infant and
toddler area here as a whole follows the one chief I/T rule:
No matter what the demographic, we all want out babies to
be cute and comfortable! Target manages to offer product
at three distinct price points (good, better, best) to satisfy
the tastes and needs of the various demographics that do
shop there. So what could be added here? Perhaps Target
could try to incorporate some infant 'learning' properties
such as Baby Einstein in novel apparel related ways. How
about some sleepers with striped feet or with a detachable
squeaker that incorporate both play and apparel value? Or
some 'Leap Frog' sets that come with a little interactive
toy or booklet. Another fun idea might be to incorporate
the 'twofer' thinking onto the main store floor. As we mentioned
before, the baby care aisle features packages with two pairs
of pants or two creepers. How about having some of that
convenience and value for the shoppers and gift buyers who
are not heading to (or are unaware of!) the baby care aisle!
A look into the department:
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