Target to Self-Distribute Perishables Within 5 Years

ELLIOT ZWIEBACH

MINNEAPOLIS — Target Corp. here expects to handle perishables distribution completely on its own "within a timeframe earlier than four or five years," Gregg Steinhafel, president, told analysts yesterday. Until then, he said, "we will have a hybrid network for the foreseeable future where we are dependent on our own facilities and on Supervalu and other wholesalers." He reiterated plans for the company to convert a Supervalu facility in Lake City, Fla., to a Target-owned semi-automated dedicated perishables center later this year and said the company would build a second perishables facility, scheduled to open next year, that industry sources told SN will be in Cedar Falls, Iowa. The sources also said Target plans to convert a Supervalu distribution center in Fort Worth, Texas, to a Target-owned grocery facility in early 2009 and another Supervalu venue, in Phoenix, later next year. For the 13-week fourth quarter ended Feb. 2 net income fell 8.1% to $1 billion, compared with $1.1 billion in last year's 14-week quarter, while total revenues, encompassing retail sales and credit card revenues, rose 0.8% to $19.9 billion and comparable store sales increased 0.2%; excluding the extra week the company said revenues climbed 6.3%. For the 52-week year net income rose 2.2% to $2.8 billion, while total revenues rose 6.5% to $63.4 billion and comps increased 3%; excluding the extra week in the prior year, total revenues were up 8.4%, the company said.

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