Target is one of the darlings of retail brands in today’s day in age. In 2017, Target initiated a $7B reinvestment program to renovate existing stores and to open smaller format stores. The company has opened its 100th small-format store and has remodeled its 500th existing store unit since 2017. The goal is for Target to update approx. 1,000 of 1,800 existing store base by the end of 2020. Target’s strategy is paying off well and other retailers should take note. The average remodeled store is enjoying an approx. 2-4% bump in store sales post renovation.
Target is strong and is writing the recipe for how to be successful moving into the future within the retail sector. They are reinvesting in their existing units to maximize value, integrating and adopting omnichannel and incorporating pickup. Target’s online business has grown substantially, approx. 34% year over year with 75% of that growth from in-store or curbside pickup. The world of retail is not a see and wait approach. If you are a retailer and want to remain relevant having longevity within the landscape, you must have a proactive approach to your business plan. Omnichannel is a must and providing the customer with a painless enjoyable experience is mandatory. Shopping Centers that have a Target as an anchor tenant or are within proximity are enjoying the draw of this retailer including the synergy and store traffic generated. This leads to higher occupy at these specific centers which ultimately drives small shop rents for the inline space due to demand of the co-tenancy.