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MINNEAPOLIS — Target reported a 4.4% increase in May same-store sales that was toward the upper end of a guidance range that called for a low-to-mid single-digit increase.
The gain comes on top of a prior year increase of 2.8% and was driven primarily by an increase in transaction sizes and to a lesser extent increase in customer traffic. As in prior months, May results were strongest in food, which experienced a low double-digit increase. Apparel and health and beauty were also mentioned as top performing categories that grew faster than the company average. That wasn’t the case with the home and hardlines categories where a decline was evident.
The company said stores in every region of the country experienced a healthy increase in comparable-store sales, but beyond the high level category and regional comments there wasn’t much in the way of specifics. No mention of the effectiveness of the REDcard Rewards program as a driver of the increased transaction size or the impact of The Shops at Target merchandising initiative that hit stores in early May and brought newness to key categories and visual interest to stores. Instead, Target chairman, president and CEO Gregg Steinhafel spoke in generalities and commented on the company’s 50th anniversary.
“As we reflect on Target’s first 50 years and celebrate the power of our brand, the resilience of our strategy and the strength of our talented team, we’re confident that Target is well-positioned to continue delivering a superior guest experience and strong financial performance for many years to come,” Steinhafel said.
Perhaps shareholders will hear more about the company’s performance expectations when Steinhafel, board members and other executives assemble for the annual meeting on Wednesday, June 13. This year the event will be held inside a soon-to-open CityTarget store in downtown Chicago so meaningful insights into the growth potential of the format are likely to be shared.