Target closed 2020 with sales and growth boom
Target increased its comparable sales in 2020 by a whopping $15 billion — 19.3% more than 2019. That's also more growth for Target than the last 11 years combined.
The bottom line: Shares of Target finished at $173 on Tuesday, after the company released its fourth quarter earnings. That's up from around $94 a share at the start of the pandemic.
Driving the news: Target took advantage of a dramatic shift in pandemic shopping habits as its digital sales grew by $10 billion last year.
- Under CEO Brian Cornell, the retailer was already making significant investments in turning stores into mini shipping hubs, helping boost ship-to-home capabilities, curbside pickup and in-store pickup.
- Target pivoted quickly when the pandemic hit. An example: It closed the Starbucks shops it operates inside of stores and enlisted baristas to help pack and ship online orders.
Yes, but: While big-box retailers like Target and Walmart have benefited from the pandemic, small retailers and apparel stores have not.
- While big-box retailers have been considered essential and faced fewer restrictions, smaller retailers have been forced to temporarily close in many states.
- U.S. apparel sales fell 30% in the first nine months of 2020, according to Retail Dive, and that could lead to more bankruptcies and store closures.
What's ahead: Of Target's $15 billion in sales gains, $9 billion came from taking market share from competitors, the company said.
Target wants to build on that and will spend $4 billion in 2021 opening and remodeling stores. This includes 30 to 40 new stores a year, focusing on small urban formats in places like New York City, Portland, Oregon, and Los Angeles.
- After pausing a remodeling program during the pandemic, Target will revamp 150 stores before the holiday shopping season and plans to remodel 200 more next year.
This story first appeared in the Axios Twin Cities newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.