While many budget retailers have seen sales drop in the past decade, Target’s 2011 year-end sales of $68.5 billion is more than double its 2001 revenues.
We reviewed a decades worth of sales data from Target, JCPenney, Sears* and Kmart stores to show how Target literally eclipsed its competition.
So how did Target manage such an impressive growth while other competitors struggled to hold on to customers? A few things:
Having the right number of stores in good locations: Even in 2001, there was a clue to Target’s major future success: at $30.9 million, its average sales per store was nearly double the same ratio for JC Penney and Kmart and nearly triple the average sales per store at Sears, according to our analysis. And as Target opened roughly 700 new stores over the last decade, its sales numbers grew accordingly. In 2011, its average sales per store was up to $38.8 million.
Brilliant rebranding: In the age of Walmart, Target used high-profile and expensive ad campaigns and designer partnerships to set itself apart as the upscale and chic choice for bargain hunters. As a columnist for the Harvard Business Review wrote in 2010, “Everything from store layout to advertising to inventory conveys an eye for style.” When the much-anticipated budget line by famed designer Jason Wu hit Target shelves and its online site last month, much of the clothing sold out within hours.
Superstores: In recent years Target has turned its eyes to beefing up its grocery offerings, dedicating $2 billion in capital funding to store renovations. The benefits of becoming a legitimate grocery option for consumers is twofold. The move allows it to take on Walmart head on. It also helps draw customers inside its doors more often, which increases their likelihood to buy other items as well. Who hasn’t gone on a quick errand to Target only to return with a shopping cart full of goods?
But don’t take our word for it, check out the interactive graphic below. Select “Unique colours,” size by “Sales,” uncheck “Trails” and check all four stores’ names before hitting “Play.”
Source: annual reports and SEC filings
*For continuity we did not include sales numbers from Sears’ Canadian division. Sears Holding Corp. has owned and operated both Sears and Kmart locations since a 2005 merger.
**Retail fiscal years end in the following January, so the 12/31 dates are intended to prevent confusion and are not the actual ending date of the official fiscal year.
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