Big box bonanza continues as Target reports blowout sales
Walmart, Home Depot and now Target have all benefited from changes in consumer behaviour during coronavirus pandemic.
Target reported recorded-setting sales growth online and at established stores over the past three months – more evidence that big box retailers have become essential points of supply during the coronavirus pandemic in the United States.
Online sales surged 195 percent and same-store sales spiked 10.9 percent, second-quarter growth that is unprecedented in the company’s 58-year history.
Walmart, Home Depot and now Target have reported eye-popping sales over the past three months as US consumers limit their supply runs to fewer stores and do more cooking and do-it-yourself projects at home.
The shift in behaviour is reshaping the retail landscape at the expense of mall-based retailers and other stores forced to close this year. Many were struggling before the pandemic because of what Americans buy and where they buy it.
The pandemic has put those retailers in further in peril.
Dozens, including JC Penney, Neiman Marcus and J Crew, have filed for bankruptcy protection this year. Another wave of bankruptcy filings is expected in the fall with the US failure to contain the virus accelerating the demise of more companies in the sector.
US consumers came to rely on big box retailers for supplies early when the economy was under lockdown. The surge in new infections is keeping people closer to home in many places, and they are increasingly relying on same-day delivery and curbside pickup. Big box retailers had pushed aggressively into those areas before the pandemic in an attempt to keep pace with online retailing giant Amazon.com.
Also on Wednesday, Lowe’s reported comparable store sales in the US surged 35.1 percent and online orders more than doubled.
A day earlier, Walmart reported online sales nearly doubled in its most recent quarter after it expanded online services.
And sales at established Walmart stores in the US jumped 9.3 percent. Home Depot, the nation’s largest home improvement chain, reported a 23.4 percent increase in global sales at established stores Tuesday.
Target said that it added 10 million new online customers during the first half of the year and gained $5bn in market share. Clothing sales, which tumbled 20 percent in the first three months of the year as people focused on necessities, saw double-digit growth in the second quarter.
Drive-up services increased more than sevenfold. And sales related to in-store pick up increased more than 60 percent during the quarter.
Target earned $1.69bn, or $3.35 per share. That compares with $938m, or $1.83 per share for the same period one year ago.
Removing one-time costs and benefits, Target earned $3.38 a share, blowing past the $1.63 projected by Wall Street, according to a survey by FactSet.
Revenue rose 25 percent to $22.7bn, also exceeding expectations.