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Target general overview
Target Corp. (TGT), boosted by stronger-than-expected
results at its namesake chain, said November same-store
sales rose 6.2%, above the company's plan as well as Wall
Street's forecast of 5.1% growth. Target stores' same-store
sales rose 7.4% in the four weeks ended Nov. 30, exceeding
the company's plan for 4% to 6% growth at the discount chain.
According to the retailer's prerecorded sales message, the
strongest-selling merchandise at Target stores included
entertainment, domestics, pharmacy, household, personal
and baby products. The weakest categories were men's apparel,
home decor and intimate apparel.
For December, Target expects same-store sales to increase
5% to 7% at Target stores. For the year to-date period,
Target's company-wide same-store sales rose 2.4%. Total
sales increased 9.2% to $35.98 billion.
A recent report points to Target's perceived advantage
over its closest big box retail rival, Wal-Mart. Consumers
are currently spending more on so-called "discretionary"
goods, a trend likely to benefit retailer Target Corp. (TGT)
more than rival Walmart Stores Inc. (WMT), according to
US Bancorp Piper Jaffray. "Our research indicates that
Walmart tends to lag other retailers (notably Target) in
terms of sales gains and valuation during periods of economic
recovery," said US Bancorp analyst Jeffrey Klinefelter,
in a research report published Monday. "We anticipate
a similar trend during the current discretionary" recovery.
Klinefelter said
Target's advantage boils down to types of merchandise and
demographics. Catering to a higher-income customer, the
analyst said Target's shelves are geared more to a recovery
in spending on elective goods, with 45% of its merchandise
considered optional for the consumer; by contrast, 30% of
Wal Mart products fall into this category. "...While
management (at Walmart stores) has been taking steps to
improve (and expand) its discretionary assortment with the
recent launch of Levi's apparel, we believe the apparel
category will be challenging for Walmart to expand,"
the analyst said. But the recent news that Target too would
be carrying the Levi's Strauss Signature may upset the balance
between the two rivals. Part of the men's Signature line
is being launched at all 1,227 Target stores this month.
Jeff Beckman, a Levi spokesman, said the roll-out of the
women's and kid's lines and the rest of the men's line will
begin in January.
Toddler and infant department overview
The Target infant's and toddler's department has
been looking very sharp. The Circo table program is a great
deal as always and the Cherokee program continues to offer
solid middle of the road merchandise. Genuine Kids (Osh
Kosh's sub brand) has been given more floor space than in
recent months and it appears that the line is being met
with a favorable response. Less of this merchandise is on
the clearance rack than at the initial launch and the merchandise
that they are offering for transition is looking cute and
very 'Osh Koshish'!
Opportunities
Here too we have noticed that Genuine Kids has a
great concept going. Coordinated groupings with several
interchangeable options give parents the flexibility they
need. It is not uncommon for parents to buy many pieces
in the same or similar colors so that they are not limited
to an outfit in the event of a spit up! So the opportunity
here is to offer flexibility! Perhaps you could merchandise
2 for 1 tops or bottoms, reversible fleece or lined jersey
jackets, several bibs with a knit top or 2 for 1 leggings.
We also think that there could be more of a licensed presence
here. In the 7-14 area, Target offers coordinated Bratz
and My Little Pony fashions. Perhaps here we could have
some Care Bears or Strawberry Shortcake 'collectible'or
'connectible' fashions!
A look into the department:
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