Target is not one to shy away from upping the ante in the retail sector, and it’s got the earnings report to back those bets. Recently, the retailer released its Q2 earnings report, and the company disclosed a record-breaking growth, roughly $5 billion in market share in the past six months to be exact.
One such strategy that has helped propel this growth is the reinstatement of fresh and frozen food to its Drive Up service, which was momentarily put on hold in late March.
“Perhaps the most vivid example of our progress is the fact that we’ve resumed our plans to add fresh, refrigerated, and frozen items to our pickup and Drive Up services,” Chief Operating Officer John Mulligan said in a conference call to investors. “Going into the year, we had planned to roll out this capability to half or more of our stores. However, in March, given the severe swings we were seeing in store traffic and the onslaught of new routines we were asking our store teams to perform, we paused on this rollout to provide our team more time to focus on safely serving our guests.”
Target resumed those plans in May, which accounted for some of its success in the second quarter.
“Our teams and systems are successfully handling the additional complexity that comes with these expanded assortments, and our guests are happy as well,” Mulligan continued. “They’re telling us they appreciate the ability to receive these items without shopping our sales floor, providing them a contactless option when that is their preference.”
Brian Cornell, Chairman and Chief Executive Officer, further highlighted Target’s success during this quarter.
“Our second quarter comparable sales growth of 24.3 percent is the strongest we have ever reported, which is a true testament to the resilience of our team and the durability of our business model,” Cornell remarked. “Our stores were the key to this unprecedented growth, with in-store comp sales growing 10.9 percent and stores enabling more than three-quarters of Target's digital sales, which rose nearly 200 percent. We also generated outstanding profitability in the quarter, even as we made significant investments in pay and benefits for our team.”
As Cornell stated in the release, a massive jump in digital sales was one of the main drivers this past quarter, culminating in a whopping 195 percent. This unprecedented growth is a testament to how retail heavyweights have continued to thrive amongst the pandemic, with continued investments in employees and customers top of mind.
“We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year,” Cornell continued. “With our differentiated merchandising assortment, a comprehensive set of convenient fulfillment options, a strong balance sheet, and our deeply dedicated team, we are well-equipped to navigate the ongoing challenges of the pandemic, and continue to grow profitably in the years ahead.”
For more details and to read the earnings report in full, click here.
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