MINNEAPOLIS -- Dayton Hudson here said last week it plans to open 15 SuperTarget stores next year, five more than it had previously planned, according to a published report.
Dayton Hudson currently has 15 SuperTarget stores and, as recently as last May, had said it would add another 10 next year on the way to opening a total of 200 units in the next decade.
Industry analysts said Dayton Hudson's reported move to open five more stores than originally planned for next year shows the company is heightening its commitment to superstores without abandoning its cautious approach to the format. News of the additional five units came in a report from Reuters.
Like the 622 Wal-Mart Supercenters operated by Wal-Mart Stores, Bentonville, Ark., SuperTargets feature 150,000-plus square feet of store space devoted both to the general merchandise the two chains sell in their other discount stores and to a full line of groceries.
"It's not monumental," said Jonathan Zeigler, a San Francisco-based analyst for Salomon Smith Barney, New York, noting that Wal-Mart is committed to rolling out 150 of its Supercenters next year. "But it is a big deal for Dayton Hudson. It's a vote of confidence. It does signal the direction they want to move in."
Chuck Cerankosky, an analyst for McDonald & Co., Cleveland, agreed that five more SuperTargets will not change the face of American retailing. "It is, however, going to be significant to whatever existing retailers those stores are opening against," he said. "A single market operator is going to feel the pressure."
Dayton Hudson also last week reported sales and earnings for the second quarter and first half ended July 31. Sales for the quarter were up 9.9% to $7.75 billion; comparable-store sales for Target (both regular and SuperTargets, the company does not provide separate figures) were up 6.5%; net earnings increased 30.2% to $224 million; and earnings per share were 50 cents, up from 38 cents
For the first half, revenues were up 11.1% to $15.0 billion; comparable-store sales at Target rose 7.3%; net earnings were up 26.7% to $418 million; and earnings per share were 93 cents, up from 73 cents.
For Target stores (regular and super) sales rose 12.6% to $6.0 billion in the second quarter and 13.4% to $11.5 billion in the half.
Bob Ulrich, Dayton Hudson chairman and chief executive officer, said, "We are pleased with the company's performance in the second quarter, which was driven by exceptional strength at Target."