Target openings up supercenters by 13 - SuperTarget - Brief Article

DSN Retailing Today, July 23, 2001

MINNEAPOLIS -- Target plans to bow 33 new units this week, of which more than one-third will be in SuperTarget format, the company's newest growth vehicle. By month's end, the retailer will have approximately 50 such units, including two in the retailer's home state of Minnesota.

Sixty to 62 SuperTarget's will be open by yearend. And while that may seem small relative to Wal-Mart's supercenter expansion of more than 170 units this year, it's a sizeable leap for Target. In fact, the retailer doubled the number of SuperTarget's last year and will do so again in 2001. The. supercenters represent approximately "one-half of the company's incremental square footage," said chairman and ceo Bob Ulrich. "Super Target is expected to produce a significant portion of our growth, contributing to consistent increases in both square footage and sales for many years."

DSN Retailing Today estimates that the SuperTarget stores contributed $1.6 billion to the Target Stores Division's total sales of $29.3 billion for the fiscal year ended Feb. 3, 2001. That's an average revenue of nearly $54 million per store. At this rate of expansion, the company will realize an additional $700 million in revenue from the 13 SuperTarget stores opening this summer. Furthermore, based on the company's recent growth and financial data, when all 30 new units planned for this year are open, the total revenue generated by the division should surpass $3 billion.

And in spite of a severe economic climate, Target stores continue to rack up double-digit sales increases. As of July 7, the discount division posted a 10.5% sales increase year to date, although comp store sales rose just 2.8%. Management estimates comp sales to stay in this range for the remainder of this years

However, fewer than half of the existing SuperTarget's were open at this time last year, and therefore don't offer legitimate comparable financial figures. However, with plans to double the store base year over year, it's clear the benefits will go straight to the bottom. line.