Target Corp.’s TGT upbeat -0.53% sales announcement for the November-December holiday period bolstered the case for brick-and-mortar stores, even as consumers switch to e-commerce at a rapid pace during the coronavirus pandemic , analysts and experts say. Target said early Wednesday that same-store sales rose 17.2% over the holidays, with an average ticket increase of 12.4%. Use of same-day services such as Drive Up and Order Pick up increased 193%.
Target’s Holiday Sales Show Store Importance Even As COVID-19 Boosts Business Online
Comparable digital sales increased 102%. Taking into account in-store sales, same-day services, and in-store shipping, about 95% of sales for this period were satisfied by Target stores. Target CEO Brian Cornell has spoken about the value of in-store fulfillment during previous earnings reports. See: Walmart Tests Grocery Delivery Technology With HomeValet’s ‘Smart Box’ “Since Same Day Options Depend On Our Store Assets, Equipment And Inventory, They Are Much More Profitable Than Ecommerce Fulfillment traditional, “Cornell said in 2019. Even as shoppers avoid stores during the COVID-19 pandemic, they are still proving their worth in other ways. “A few years ago, Brian Cornell’s decision to focus and invest in brick-and-mortar stores was greeted with skepticism by Wall Street. Today Brian Cornell and his team are having the last laugh, ”wrote Neil Saunders, managing director of GlobalData Retail, in a note published Wednesday. “Target has capped off a phenomenal year with a brilliant set of holiday sales figures. The strong growth underscores the fact that Target continued to be a one-stop destination for consumers shopping for everything from gifts to Christmas decorations to groceries. ”Target said it gained market share in core categories like home and electronics. Other experts also highlighted That. “Target’s sales results for the 2020 holidays … continue to position it as one of the true pioneers in US retail and reinforce the importance of brick-and-mortar stores in a multi-channel model, especially at retail. In light of the challenging delivery environment, “said Moody’s Vice President Charlie. O’Shea in a statement.” While the retail dynamics created by the pandemic clouds the relevance of year-over-year comparisons, Target’s numbers by any means they erase the bullseye as you continue to expand market share. “Plus, every day of the holiday shopping season exceeded the $ 1 Billion in Online Sales: Adobe O’Shea noted the importance of January for Super Bowl electronics purchases, gift card redemptions, and returns, but remains confident in Target’s execution. “While expectations were high, these results bode well for history as they indicate significant customer growth, market share gains, omnichannel model benefits, and overall strong execution,” wrote analysts from Credit Suisse directed by Seth Sigman. “In addition, there are upcoming catalysts that include stimulus that could help even more in the short term.” Credit Suisse rates Target’s stock outperforming with a price target of $ 211. KeyBanc Capital Markets is also bullish on what the results of the holiday mean for the retailer’s prospects going forward. “We continue to believe that the next stage of e-commerce growth will be driven by localized inventory clusters, and Target is well positioned within this framework,” wrote analysts led by Edward Yruma. Read: Boot Barn Updated As Country And Western Style Is Dragged Down By A Casual Trend “In the long term, we believe Target (along with Stitch Fix) are well positioned to capture share of ongoing closings in the store space of departments and specialties “. Target stocks have gained nearly 60% over the last year, outperforming SPDR S&P Retail’s XRT ETF, -0.36%, which is up 57.9% over the period. And the benchmark S&P 500 SPX index, + 0.09% has gained 15.8% over the period.