MINNEAPOLIS — Target Corp. here said Thursday that it would slow the pace of its P-fresh remodeling program in 2012, with only 230 stores scheduled for a revamp that greatly expands the grocery offering in traditional Target stores.
That number is down from almost 400 P-fresh remodels in 2011, the company said during its fourth-quarter earnings call with investors.
Gregg Steinhafel, chairman, president and chief executive officer, explained that the company launched the remodeling effort in its higher-volume stores in urban and suburban locations, and is now moving onto lower-volume stores.
“Over time as we completed and we [fill in] those [high-volume] markets, we believe that this cadence is a more appropriate cadence as we go forward,” he said. “Secondly, we're working on a lower cost investment on some of these, and so we're just looking at extending out the program a little bit.”
He said the company “never was really all that specific in terms of how long it was going to take to complete this program. We just feel with everything else that's going on, it's the appropriate number for 2012.”
The company said the expansion of its grocery offering is driving sales gains and that early remodels are “meeting expectations” in year two.
“Among need-based categories, grocery continues to lead the way with double-digit comps as we continue to add square footage in our remodeled stores and our general merchandise guests increasingly associate Target with food,” said Kathryn A. Tesija, executive vice president, merchandising.
As previously reported, overall comparable-store sales were up 2.2% in the fourth quarter as the company said it chose not to be overly promotional during the holiday season. On Thursday the company said net income was down 5.2% to $981 million for the three-month fourth quarter, which ended Jan. 28. For the full year, net income rose 0.3%, to $2.93 billion, on a 3.7% increase in revenues, to $69.9 billion.