Dive Brief:
- After “multiple years of working to improve performance,” Target confirmed it plans to close four stores on May 13. The small-format stores closing include one located in Philadelphia, one in Minneapolis and two in the Washington, D.C., metro area.
- Target said small-format stores remain an important part of the company’s growth. Half of the approximately 20 new stores the company plans to open this year will be smaller locations of about 50,000 square feet or less.
- Nearly 50 Target stores are listed on the retailer’s upcoming store openings page, ranging from an approximately 19,000-square-foot location in Alabama to stores with footprints approaching 150,000 square feet in several states, including Delaware, Florida, Iowa, Nebraska, North Carolina and South Carolina.
Dive Insight:
Target is one of America’s largest and most popular retailers, with a loyal customer base that contributed to a nearly 3% rise in sales to $107.6 billion last year. But Target, like all retailers, constantly evaluates its store footprint. And that means some locations don’t stay open.
“The decision to close any of our stores isn’t something we take lightly. It’s an action we take only after multiple years of working to improve performance,” Target spokesperson Kayla Castañeda told Retail Dive in an email.
While the stores will close in the spring, Castaneda said “we remain committed to these areas, including the more than 50 stores we operate in each metro area.” Team members at the affected stores will have an opportunity to work at nearby locations.
“All good retailers review their store portfolio, often resulting in adjustments to stores, remodels, relocations, and sometimes closures. We don't view Target closing a few stores as cause for concern,” Joe Feldman, an analyst with Telsey Advisory Group, told Retail Dive in an email.
Target upcoming small-format store closures
| State | City | Address |
|---|---|---|
| Maryland | College Park | 7501 Baltimore Ave. |
| Minnesota | Minneapolis | 1300 W Lake St. |
| Pennsylvania | Philadelphia | 1128 Chestnut St. |
| Virginia | Falls Church | 500 S Washington St. |
Although the soon-to-close locations are all small-format stores, the decision to close them was related to their individual locations, performance and foot traffic, not their size, the company said. Target said it’s committed to operating and opening stores of all sizes. Overall, about 150 of the company’s nearly 2,000 stores are small format.
“Each retailer has a different strategy to reach its customers,” Feldman said. “Target has successfully opened smaller, neighborhood-oriented stores in smaller markets and near/on college campuses. Smaller stores are not the key driver of Target's future store strategy, but they play a role in it.”
About half of the stores Target plans to open this year will be smaller format stores. A typical Target is about 130,000 square feet, while the company considers any store with a footprint of less than 50,000 feet to be a small format.
Chief Operating Officer John Mulligan said on a February earnings call that Target plans to invest in about 175 stores this year. The investments will range “from full remodels to the addition of shop-in-shop experiences like Ulta Beauty and retrofitted fulfillment spaces to support our same-day services.”
“We’ve built the capabilities to open and operate stores in spaces of any size – from dense urban areas to sprawling suburbs to college campuses,” the company says on its website. The retailer also says it is focusing on developing larger store formats in the future.
