TORONTO — Target Corp. said it expects U.S. expansion to slow to less than the 5% annual growth the company has been projecting, according to local reports.
After very aggressive new-store expansion the last few years, the company said it is scaling back because of the economic and consumer environment, the reports said.
Though it has been opening 30, 40 or 50 stores a year, "that's just not going to happen in this environment," Gregg Steinhafel, chairman, president and chief executive officer, said at the company's investor conference here Wednesday, the reports said.
He also reportedly said a cutback of 150 workers at the corporate level earlier this month involved personnel working on new-store development and the mostly completed rollout of P-Fresh.
Steinhafel told analysts the company, which is based in Minneapolis, has learned a lot from the eight urban-oriented City Targets it operates "[including] how to make the format even smaller." The stores, all of which have opened since mid-2012, range from 85,000 square feet to 100,000 square feet.
Steinhafel also said Target's Canadian sales have fallen "well short of expectations" after nearly a year of operating there, though the company still expects to hit its five-year goal of $6 billion in annual Canadian sales by 2017. Although sales in Canada are not yet meeting initial expectations, "we're confident about out long-term potential and confident we will meet our long-range goals."
One Canadian analyst estimated that Target's sales in Canada are falling 20% to 30% below projections, according to local reports.
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