Target shoppers stocked up on electronics, home products and other items during the holidays as sales soared with increased traffic and heightened consumer spending both at stores and online.
On Wednesday, Target announced its comparable sales grew 17.2% in November and December with same-store sales increasing more than 4% and comparable digital sales jumping 102%.
Store and digital traffic grew more than 4% and the amount customers spent on average per visit climbed more than 12%.
Target did so well that the Minneapolis-based company announced seasons in advance that it will again be closed on Thanksgiving after it was closed last year during the holiday like many retailers as a pandemic precaution to prevent crowds.
The sales numbers released on Wednesday were not the company's final report on the season — it will release its quarterly and year-end results in March. But retail experts said the holiday numbers and Thanksgiving announcement reaffirms Target as one of the big business winners in its response to the COVID-19 pandemic as the retailer has gained market share in an array of product categories and built trust with consumers.
"The momentum in our business continued in the holiday season with notable market share gains across our entire product portfolio," Chief Executive Brian Cornell said in a statement. "We're very pleased with our results, and the strength of our performance is a reflection of the tireless work of our team to support our guests through a safe, convenient and inspirational experience."
Target has made gains throughout the coronavirus pandemic as many consumers came to rely on big-box stores and different types of online buying. As Target solidified itself as a place to turn to for essentials like cleaning supplies and groceries during the pandemic, consumers' loyalty to the store translated to their discretionary spending for the holidays, said Marshal Cohen, chief industry adviser for retail market research company the NPD Group.
"What they were able to do by being essentially a one-stop shop was build loyalty even with new consumers," he said. "People discovered Target again."
Target's sales were helped because many shoppers were still concerned about safety and wanted to shop somewhere they believed was safe and clean and reduce the number of visits to different stores, Cohen said. Target like other major stores spread out its holiday deals, starting some promotions early, which likely also helped sales.
The numbers were a large improvement from the 2019 holiday season when Target's comparable sales grew only 1.4% and failed to meet expectations in large part due to a weak performance in normally popular Christmas gift items such as electronics and toys.
The recent holiday season saw a reversal of sorts from 2019 with sales growing in the low 20% range in home merchandise, which includes holiday decorations, and its "hardlines" category, which reflects surges in demand for electronics.
Food and beverage comparable sales were on par with the overall growth average. Beauty and essentials sales jumped in the low teens. Perhaps the biggest surprise was that apparel — which has taken a hit during the pandemic as people have not needed much in new clothes as they sheltered at home — also saw an increase in the high single-digit range.
"Apparel has been a very difficult category. … I know it was only in the upper single digits but oh, my gosh, how did they pull that one off?" said Scott Mushkin, retail analyst and founder of R5 Capital.
Mushkin said Target leadership has done well in past years to invest in improvements in physical stores and curated product lines.
"They are just hitting on all cylinders," Mushkin said.
Sales on same-day services continued to grow dramatically during the holidays by nearly 200% with "drive-up" growing more than 500% and sales through home delivery done by Target-owned Shipt growing more than 300%.
On one day in December, Target employees fulfilled 6.5 million items via "drive-up" and pickup, the most ever for Target in a single day.
Strong sales have continued into the new year, Cornell said.
The company's shares closed Wednesday at $196.82, losing $2.28.
Nicole Norfleet • 612-673-4495