Target reported a monstrous quarter on Monday, as online sales nearly tripled thanks to a variety of same-day order picking and delivery services that gave pandemic-weary shoppers ways to pick up products in stores. shops. . parking lots and other alternatives to going to the store.
The retailer said comparable sales rose 24% in the quarter ending Aug. 1, by far the best performance in the company’s 58-year history and double the rate from the first quarter of the year. It helped that Target has been considered an essential retailer for the sale of groceries and basic products. But the company also helped itself by investing in technology to integrate stores and e-commerce, helping online sales rise 195% in the quarter. Approximately 10 million Americans bought from Target’s e-commerce site for the first time.
Shares in Target were up 7% in premarket trading, bringing them to an all-time high.
But its 1,900 stores played a starring role in Target’s successful quarter. In recent years, Target has spent billions equipping stores to ship orders online or to make it easier for shoppers to come and pick them up.
Use of Target services from the car, in-store, or same-day shipping nearly quadrupled during the quarter, demonstrating the importance of its stores to your e-commerce.
Target, which has launched a variety of popular new brands in stores in the last three years, also got people to buy in its stores, where sales increased more than 10%. Target executives saw big gains in categories like food, electronics and household goods – items that generally encourage store visits.
And in a worrying development for heavy apparel chains like Macy’s and Kohl’s, Target’s clothing sales rebounded strongly.
Target CEO Brian Cornell told reporters in a briefing that he estimates the company has made $ 5 billion in sales from other retailers across all categories since the pandemic began, a time when 44 came out. retailers. bankrupt and others like Macy’s closed dozens of stores.
The company said electronics sales rose 70% as customers bought home office supplies and video games. Sales of home goods and beauty products rose more than 20%, while food, an area in which Target finally finds its place, grew about 20%. Its Good & Gather grocery line has grown to a billion dollar mark less than a year after its launch.
“In today’s environment, each of our categories is doing very well,” Cornell said on the call. And unlike Walmart, which saw a marked slowdown in growth when government stimulus controls were stopped, Target “continued to see strong growth,” Cornell said, with comparable sales in August of at least 10%.
Total target revenue reached $ 22.9 billion in the quarter, including $ 3.9 billion online, compared to $ 18.4 billion in the same quarter last year. Chains like Target and Walmart are benefiting from a growing trend for consumers to consolidate shopping trips to stores where they can buy everything and minimize time in stores.
Target’s flexibility has served it well so far in the pandemic, and the company will have to take advantage of that, as uncertainty about consumer behavior is likely to continue into the new school year and holiday season. Cornell said back-to-school sales, which got off to a slow start, were difficult to handle. He noted that some data suggests that 66% of students are starting the school year remotely.
