Target Announces Changes for Shoppers
Target is hoping to make some changes for shoppers.
After reporting another quarterly profit decline Wednesday, the company issued a cautious sales and profit outlook for the current period and cited some upcoming shifts to counteract those.
The Minneapolis company is dealing with rising costs, which includes rising theft as a big factor, and consumers who have become more cautious about spending.
So what will that mean for shoppers?
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Grocery Emphasis
Apparently, it could mean a bigger emphasis on groceries.
Officials told CNBC the Minneapolis-based retailer is hoping to become more of a destination for food and beverage items.
"It's actually a gateway to the rest of the store," Chief Food and Beverage Officer Rick Gomez said in an interview. "It drives traffic to the store. It drives traffic to our site. And then while they're picking up what they need food- and beverage-wise, they'll browse through the rest of the store and maybe pick up a few things at Ulta [Beauty at Target] or a few things in apparel."
The company said it has added more items to its grocery brand Good & Gather, as well as to its snacks and desserts line Favorite Day.
But what will that mean for prices?
"When times are tough and you're paycheck to paycheck, you can't afford to buy food that nobody eats," Gomez said. "So it's really important to us that we offer value which is a good price, but also really good quality."
Preventing Theft
Target said theft is cutting into its bottom line and it expects related losses could be $500 million more than last year, when losses from theft were estimated to be anywhere from $700 million to $800 million. So that means losses could top $1.2 billion this year. The company said it's seeing an increasing number of violent incidents at stores as well, but does not want to close stores and is expanding security and locking up some items.
Retailers are being hit with a rash of thefts and in some case, closing stores and pulling out of locations because of massive losses, some tied to criminal gangs. The issue has received more notice in the past few years as high-profile smash-and-grab retail thefts and flash mob robberies have garnered national attention.
"We are making significant investments in strategies to prevent this from happening in our stores and protect our guests and our team," the company said in a release. "We're also focused on managing the financial impact on our business so we can continue to keep our stores open, knowing they create local jobs and offer convenient access to essentials."
Returns and Renovations
Given this competitive environment, Target is continuing to make investments in stores and online.
The discounter said in early March that it plans to invest as much as $5 billion this year expanding services for customers, including a drive-up service for returns, renovations at 175 stores and improvements in online shopping.
Target's shares rose roughly 1% at the opening bell.
'Affordable Joy'
Earlier this year, Target announced plans to "launch or expand more than 10 owned brands, bringing thousands of new, differentiated products to guests at incredible prices."
The company said it will offer more items starting at $3, $5, $10 and $15, in addition to improved promotions and changes to the Target Circle loyalty program.
Drive-Up Returns
Drive-up Target returns launched at Target stores across the Chicago area earlier this month.
“Our journey to expand our fulfillment options starts with making it easier for our guests to shop with us,” Mark Schindele, Target’s executive vice president and chief stores officer, said in a statement. “That’s why we’re launching Drive Up Returns. Allowing our guests to process a return from the comfort of their car underscores our commitment to helping our guests shop — and return — however they choose.”
Shoppers will be allowed to return most new, unopened items within 90 days of purchase from their car, for free. The time frame rises to up to a year for Target-owned brands, however.
By June, the offering will be available in Target's nearly 2,000 stores across the country.
Source: NBC Chicago
