Target Corporation (TGT) is all set to serve the residents of East Peoria, Illinois, by opening its first store in the region. The company stated that this 135,000 square feet new offering is slated to open in March 2013 and will employ about 150-200 employees.
The company capitalizes on its extensive network of stores to effectively penetrate its target markets and gain a competitive advantage over its rivals and drive sales. Moreover, to enhance the shopping experience of customers, Target is adapting to the demands of time and considering consumer-oriented strategies to improve store sales productivity.
The company is focusing on store renovations and plans to sustain its remodeling program at existing general merchandise locations, which include an expanded grocery offering, improved store layout and enhancement of in-store shopping experience across departments, such as apparel, home, beauty, shoes and baby.
In order to tap the urban markets where real estate remains a constraint, Target introduced smaller-format stores called City Target similar to its biggest rival, Wal-Mart Stores Inc. (WMT). The company stated that the new stores will vary in size from 60,000 to 100,000 square feet compared to its typical format of 125,000–180,000 square feet.
Moreover, Target is eyeing opportunities in international markets, such as Canada and Latin America. The company has plans to open 125 to 135 stores in Canada by 2013 and 2014. We believe, store openings outside the United States will definitely boost the company’s top and bottom lines and better its cash flow generation capability
Currently, we have a long-term 'Neutral' rating on the stock. However, Target, which competes with Costco Wholesale Corporation (COST), holds a Zacks #2 Rank, which translates into a short-term ‘Buy’ recommendation.
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