Irene and BTS put Target on track
So far so good. The third quarter at Target is off to a solid start as Target reported a 4.1% same-store sales increase that was squarely in the middle of the company’s guidance range, which called for an increase in the low to mid single digits.
As has been the case with prior monthly sales reports, the increase was driven primarily by growth in average transaction size although August saw a lesser contribution coming from an increase in comparable-store transactions. The 4.1% increase came on top of a prior year increase of 1.8% and particularly encouraging from Target’s perspective is that every region of the country was said to have experienced a healthy increase in comparable-store sales and back-to-school season began well.
The big wild card in the results was an estimated half a percentage point boost in same-store sales that occurred late in the month as Hurricane Irene rolled up the East Coast. The pantry loading behavior that typically goes on in advance of such stores aided Target’s August results, but now a corresponding negative impact is expected during September as consumers work off their inventory build up of food and consumables.
Despite this situation, Target maintained its monthly forecast that has been in place for most of the year, which calls for a comp increase in the range of low to mid single digits.
“August comparable-store sales were in line with our expectations, reflecting solid results in our back-to-school and back-to-college categories,” said Target chairman, president and CEO Gregg Steinhafel. “While the pace of the economic recovery is uneven and uncertain, we are confident in our ability to execute on our strategy, to offer the right balance of extraordinary value, convenience, newness and differentiation and to remain our guests’ preferred shopping destination.”
With regard to specific categories, once again comparable-store sales in grocery increased in the mid to upper teens, while health care, beauty and household essentials increased in the mid single-digit range. Another area of increase was apparel which was up slightly led by double digit increases in the intimate, hosiery and performance segments. The company said same store sales in hardline categories declined in the low single-digit range and home categories declined slightly.
Thanks for the memories
Target’s relationship with the Peterson Milla Hooks ad agency is ending soon but Ad Age reported on details of a final campaign set to air soon for the new Missoni line of apparel and accessories due to hit stores this month for a limited engagement. According to Ad Age, the new campaign includes a 30 second spot shot in Milan that features Margherita Missoni, granddaughter of Missoni’s founders.
Ad Age assembled a unique collection of memorable work the agency produced for Target over the past decade. Click here to check out some of the award winning creative that helped establish the Bullseye as the iconic logo it is today as well as the new Missoni spot: greatest-hits list.
New report details pharmacy activity
Drug Store News is out with its Annual Prescriber Report which makes for interesting reading for those involved in the pharmacy business or interested in where the health care industry is heading. The report is available in digital format by clicking here. The digital interface is high quality so be patient.
Drug Store News is published by the same company, Lebhar-Friedman, as Retailing Today and Target News Now.