NEW YORK — While a slowly progressing economic recovery in the U.S. will likely limit new store growth in coming years, Target Corp. is looking to urban formats, international expansion and e-commerce to supplement growth and gain wallet share, Greg Steinhafel, Target’s chief executive officer, said during a presentation for investors here Friday.
Steinhafel said he was confident Target could reach $100 billion in annual sales by 2017. The company had $66 billion in sales in fiscal 2010. "As we plan our sales, we believe it's likely that the current economic recovery will continue to evolve slowly and unevenly, producing only modest annual increases in GDP and consumer spending," Steinhafel said. "Against that backdrop we'll work to gain greater loyalty and wallet share from our guests, particularly as they increase their shopping frequency in response to our remodels and 5% Rewards Program.
“We have the desire, capital and team that would allow us to grow more quickly, but our baseline economic assumptions are not expected to create the breadth of new store opportunities we’ve enjoyed in the boom years,” he added.
Steinhafel said Target would supplement U.S. growth with the launch of City Target stores in four markets next year. He said the company would evaluate the results at five pilot stores with eyes on expanding to additional locations. Steinhafel said the company had identified "hundreds" of potential trade areas.
Expansion into Canada, made possible by the recent acquisition of 220 Zellers stores there, could add $6 billion to sales by 2017, he added. Target is expected to open its first stores there in 2013.