Target has spent the past few years building giant SuperTargets which sell everything from clothing to electronics to groceries. But the second largest discount retailer is trying another kind of experiment: smaller Target stores opening in urban environments. The stores are smaller because space is at such a premium in urban areas.
The company is researching the option, Chairman and Chief Executive Officer Gregg Steinhafel said yesterday in an interview at Target's Minneapolis headquarters, adding that the retailer has no definitive plans or sites for such stores.
"We know that consumers in dense urban areas love Target," Steinhafel said. "We have to work harder at trying to get a smaller Target in those areas."
Target plans to open more U.S. stores in metropolitan areas as well as remodel existing locations to add groceries and encourage more frequent visits. On its earnings call yesterday, the company said it's planning for a "modest" decrease in fourth-quarter sales at stores open at least a year as shoppers continue to pare discretionary spending.
Tests at Target's Atlantic Terminal store in Brooklyn and two or three other urban sites may help the retailer prepare for smaller formats, Steinhafel said. At those locations, Target pruned the number of items available by as much as 25 percent by cutting certain sizes and colors of products to ensure the stores are well-stocked, he said. Target’s general merchandise stores average 128,000 square feet.
The recession has really thrown retailers for a loop, even the the big discount chains such as Wal-Mart and Target. They are both experimenting with different formats and store types to see what works in this daunting retail environment.
