Being one of the few companies that have stayed in business after lockdown throughout the world, Target is experiencing a mixed response to its various categories including offline with online leading the charge in sales for the first time.
While digital sales were up 100 per cent Y-o-Y since the start of February, in April they hit a whopping 275 per cent increase. However, same store comparable sales are seeing dip as the rush to panic buy that was seen in March is now over.
Overall, the company may expect same store sales to increase approximately 7 per cent, but operating margins will likely drop by 5 per cent in the first quarter.
Target’s comparable sales for essentials were up 40 per cent in March and 12 per cent in April. This slowdown in the essential category reflects the unavailability of products on their e-commerce portal as well as consumers’ shifting mindset about hoarding groceries.
In addition to online services, Target offers delivery of essentials and grocery items through shipment from all of its store locations. It also offers in-store and curbside pickup service that includes some non-perishable food and beverage products.
However, not offering fresh groceries as part of its pickup service could hurt the company as it continues to push through the pandemic.
The apparel and accessories category is one of the biggest hit segments with a 30 per cent decline in March and exceeding to 40 per cent in April. The company has announced the extension of its US $ 2 per hour wage increase up till 30 May.