Sacramento gets Fresh & Easy
SACRAMENTO, Calif. — Fresh & Easy Tuesday made its Sacramento, Calif. debut with the opening of two new stores in the region. The retailer plans to open five new stores in the Sacramento area this month.
“’Fresh & Easy’ investment in our community is a significant milestone for District 8. Fresh & Easy is a smaller neighborhood serving grocery store that residents have been anxiously waiting for,” said Sacramento City Councilwoman Bonnie Pannell. “I am excited about this store and the second store to be built at the corner of Freeport and Meadowview. This is positive growth for our community.”
The three additional stores set to open in the Sacramento area include:
Joiner Parkway & Sterling Parkway
Elk Grove-Florin Road & Calvine Road
E. Natoma Street & Blue Ravine Road
“We are excited to officially open our doors in communities here in Sacramento and meet our new neighbors,” said Fresh & Easy CEO Tim Mason. “We look forward to Fresh & Easy becoming a solution for Sacramentans looking for easy meal ideas and a more affordable place to shop.”
Coming soon: the beneficial effects of dissipating disruption
The most exciting news coming to Target stores this year isn’t some new designer exclusive or enhancement to REDcard Rewards, but rather a return to operational normalcy as the PFresh remodeling program winds down. This phenomenon won’t generate the same publicity as a Jason Wu pop-up store, but the impact on shoppers and sales promises to be greater.
Recall that Target this year had planned to remodel only 230 discount stores to the PFresh concept – well below the upwards of 350 units remodeled each of the past few years. Of the 230 stores receiving PFresh fresh food and general merchandise enhancements this year, Target on Thursday said it would complete 100 of the remodels this month with the remaining 130 units due for remodel opening in two groupings later this year. As a result, by the end of March there will be roughly 1,000 Target stores in the PFresh format with a total of 1,100 stores by year end, and Target will enter 2013 with only a small number of stores remaining that are suitable for the PFresh treatment. It may be a little premature, but this month essentially marks the completion of what has been one of the most extensive and rapidly executed remodeling programs the retail industry has ever seen.
That is welcome news on several fronts as operators will no longer have to deal with the complexity of running stores undergoing extensive remodel projects, and shoppers don’t have to wonder what is going on with “their” store or where merchandise is located. Target did a lot to mitigate disruption of the store experience during remodels with extensive way-finding signage to help shoppers locate departments and colorful floor-to-ceiling graphics, which concealed the extensive work underway to add fresh food. However, the remodel process is inherently disruptive, and even loyal shoppers were inclined to go elsewhere until the project at their store was completed while those who endured the disruption tended to buy less, which negatively affected same-store sales.
Those factors fall away this year as the percentage of stores within Target’s store base that are undergoing a remodel steadily declines and becomes a non-factor next year.
The future of finance comes to New York
Incoming Target CFO John Mulligan and outgoing CFO Doug Scovanner participated in a Target sponsored meeting last Friday at the New York stock exchange. The event gave Wall Street analysts an opportunity to get to know Mulligan, and the consensus is the guy is a strong replacement for longtime CFO Scovanner whose tenure ends March 30.
That was the view of Bernstein Research analyst Colin McGranahan who indicated he expected as much from a Scovanner-run finance organization as the longtime CFO had a reputation for not suffering fools lightly. Scovanner first approached CEO Gregg Steinhafel and the board two years ago to work out his retirement and transition plan, at which point Mulligan, who had been loaned to the human resources organization for the prior two years, was brought back to the finance organization to run the treasury department and was identified as one of a number of potential internal candidates, according to McGranahan.
“The board also ran a global external search, but clearly Mulligan was well vetted and demonstrated the requisite capabilities and leadership to earn the role,” the Bernstein analyst said. “We think this long-running process should reassure investors and help quell concerns around management turnover at Target.”
Those concerns are understandable given the string of senior level departures that began last fall, but despite the loss of some high level talent, Mulligan and Scovanner assured those in attendance at the New York event the company can deliver on some ambitious long range targets.
“Both incoming and outgoing CFOs were upbeat on the long-term earnings potential of the company, including its ability to achieve $8 in earnings per share by 2017,” said Citigroup analyst Deb Weinswig. “Management believes that Canada, continued store growth in the U.S., and multichannel growth will drive topline sales and generate strong free cash flow, which the company plans to return to shareholders in the form of dividends and share repurchases.”