Cash is king as retailers navigate lockdown uncertainty: HRC Retail Advisory
Target Corp. said sales jumped during the holiday period, with the big-box retailer appearing to solidify some of the gains it made in a turbulent 2020.
Same-store sales, an important gauge of retail success, rose 17 per cent, the company said in a statement. That’s a slight slowdown from the 21 per cent the company reported in the prior three months, but still a brisk pace for a well-established retailer.
The results were underpinned by e-commerce and newer options like ordering online and picking up at the store, with curbside pickup surging 500 per cent. Additionally, customer transactions -- including in store, online or via an app -- rose 4.3 per cent despite the pandemic, and the average shopping ticket increased 12 per cent. Chief Executive Officer Brian Cornell said the strength has persisted in 2021.
“We’ve seen continued strong sales trends in the new year,” Cornell said in the statement. Target is focused on building on “the significant market share we gained throughout 2020,” he said.
Target’s early look at holiday performance suggests big-box stores are maintaining the lead they built earlier when retailers deemed nonessential closed down. Now, investors are eager to see what shopping will look like as greater swaths of the population get vaccinated and increasingly venture out of their homes following the lengthy isolation of the pandemic.
“For a big box retailer, that’ll probably be one of the better comparable sales you see for the holiday season,” said Brian Yarbrough, an analyst at Edward D. Jones & Co. “But will they hold on to all these new customers as vaccines become available?”
Target shares declined 1.2 per cent to US$196.76 at 9:57 a.m. in New York. The stock gained 38 per cent in 2020, more than double the advance of the S&P 500 Index.
The company reported it gained more market share in all five of its core merchandise categories. It didn’t provide any projections for financial performance, but did confirm that one change from 2020 is here to stay: Target will close its stores once again for Thanksgiving this year.