A rendering of Target’s urban-format store in the Beacon Hill neighborhood of Boston
Target just wrapped up a bumper year for sales and will now look to build on that momentum in a big way.
The retailer will look to spend about $4B per year for the next several years expanding and upgrading its real estate portfolio, Fortune reported. That outlay is driven by Target’s sales growing by more than $15B in 2020, which is greater than the previous 11 years combined, according to the company’s year-end fiscal statement.
Every piece of Target’s physical footprint will be affected by its anticipated spending spree. After opening 29 of its urban, small-format stores in 2020, Target CEO Brian Cornell expects the company to open up to 40 annually in the short term and remodel 200 stores every year starting in 2022. Target operates nearly 1,900 stores as of the end of last year.
Target will also grow its investment in its logistics network, as online comparable sales more than doubled in 2020, making up two-thirds of its total sales growth for the year, according to its year-end report. Part of its logistics expansion will include the opening of some centers for taking merchandise off store shelves for online orders, Fortune said.
Even Target’s online sales underscored its belief in the necessity of its stores, as its same-day ordering grew by 212% in the fourth quarter, driven by curbside pickup, which increased more than 500% during that time period. Overall, more than 95% of Target’s fourth-quarter sales were fulfilled in stores, according to the company’s filing.
Also giving Target added confidence is that it is markedly outpacing the overall retail market, gaining $9B in market share. As it continues its competition with Walmart and Amazon to be a true one-stop shop for customers, part of its store renovations will include the addition of 100 ULTA Beauty stores within Target’s own locations this year alone.