Target May Go Small to Open Urban Stores
Prime retail space is at a premium in urban locations and finding enough
space for the typical big box is hard to find. That’s why Target is considering
the development of a smaller box format to break into more locations
"We know that consumers in dense urban areas love Target," Gregg
Steinhafel, chairman and chief executive officer of the chain, told Bloomberg. "We
have to work harder at trying to get a smaller Target in those areas."
While Mr. Steinhafel did not say any smaller stores were in the works,
he did indicate that locations in places such as Brooklyn, NY had shown
the chain how it could successfully operate units well below the 128,000
square-feet size of its typical general merchandise stores.
Target plans about 12 new stores next year and more in the years that
follow, according to Doug Scovanner, chief financial officer for the
"The constraint in 2011 and 2012 is the availability of suitable
sites," Mr. Scovanner told Bloomberg. He also said the company
would like to return to historic levels of store openings of 100 units
a year if opportunities present themselves.
"We have the capital to be able to do that and we have the appetite
to do that, but the availability’s not there," he said.
Target also announced it will expand its PFresh concept to 350 more
locations over the 108 where it is currently testing fresh foods in general
merchandise stores. PFresh stores carry between 50 and 200 percent more
food products than traditional Targets in roughly 1,500 square-foot departments.
Discussion Questions: What do you think of Target’s general expansion
strategy? Do you see urban locations as a path to success? What about
its PFresh test?
- Target Considering Smaller Stores to Expand in Cities – Bloomberg
- Target to add ‘PFresh’ grocery concept at 350 stores – Denver Business
Journal/Minneapolis / St. Paul Business Journal