After a major success, say, mowing the lawn without losing a toe or installing a new light fixture without starting a fire, I like to kick back and revel in the accomplishment. Not so for the management at America's No. 2 discount retailer, Target
Though analysts and market measurers have been reporting lower consumer spending over the last few weeks, Target turned in better-than-average comps, and that was only the beginning of the successes. After delivering some stunning numbers last week, even outperforming rival Wal-Mart
Target's latest move involves secret project "P2004." OK, it's not exactly a secret project, despite the 007-ish name, but this revamp plan is already seeing successes and the lessons are trickling down to Target's stores. The Colorado prototype puts more food into the stores to increase traffic, a la Super Wal-Mart. That could spell more bad news for the already-ailing grocery industry.
The concept also reorganizes the location of some stock in order to increase sales. For instance, popular items like diapers are located in special themed sections to help drive sales of bigger-ticket items like clothes, furniture, strollers, and other items.
In the latest conference call, management said it was too early to gauge the financial success of the project, but the company has already retrofitted 80 stores with P2004's basic features, and it plans to do a similar remodel to 130 more. By year end, it hopes to install the full redesign at 200 more stores.
As I head out the door for a few groceries and tennis balls for the dog, this shopper thinks the firm is on the right track. Target's stores are already more fun and stylish than those of its competitors, and if P2004 can both increase traffic and heighten the shopper's average tab, shareholders will be well rewarded. Target's recent overachievement may be only the beginning.
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