Target Sales Surging Amid Holiday Shopping
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Target is an early winner of the U.S. holiday shopping season.
The big-box chain increased sales approximately 10% in November, according to Bloomberg Second Measure, which analyzes anonymized U.S. consumer transactions to measure revenue. The retailer’s gains doubled the rate of top rivals Walmart and Amazon. Of course, December could be a different story with the arrival of the COVID-19 omicron variant.
Target came into the holiday season already considered one of the pandemic’s winners, with its stock doubling since COVID arrived in March 2020. The chain benefited from being deemed an essential retailer, allowing it to remain open when COVID hit the U.S. But investments in refurbishing its stores and e-commerce, including curbside pickup of online orders, helped it thrive.
In a sign of just how much U.S. retailers have bounced back from the height of the pandemic, foot traffic to stores across America this year is just 0.8% below 2019 levels, according to Placer.ai, a location analytics firm. Even with COVID still rampant, overall U.S. store visits compared to two years ago gained 5.7% in October and 0.1% in November.
“I’ve been hearing ‘experts’ talk about the death of brick-and-mortar for 30 years,” said Rick Caruso, a billionaire real estate developer and shopping mall owner. “That’s silliness. There are going to be winners and losers, but that’s any industry.”
Target, which has boosted sales about 17% over the past 12 months through October, has kept attracting shoppers at a brisk pace this holiday season. Store visits from Nov. 1 through Dec. 6 are up about 12% compared to a year ago, according to Placer.ai. That just about matched Walmart’s increase and quadrupled Costco’s growth. The company’s shares have risen 23% so far this year, just ahead of the S&P 500 Stock Index.
In much-needed good news for department stores, shoppers are returning this Christmas. The sector wasn’t deemed essential and had to shutter locations during the height of the pandemic. But now consumers appear to be flocking back. Nordstrom led the way with a 63% gain in foot traffic, followed by 49% growth at Macy’s and J.C. Penney and Dillard’s both surging 42%, according to Placer.ai.
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Other discount chains besides Target are winning, too. Foot traffic at HomeGoods this holiday season is 15% above where it was two years ago. By that measure, TJ Maxx — owned by the same parent company as HomeGoods — is up 9% and Burlington gained 8%.
Among specialty stores, Ulta Beauty is proving that makeup is back with visits up 26% from a year ago. Meanwhile, Bed, Bath & Beyond has seen foot traffic plummet 19%.
Retail sales have boomed this year as federal stimulus checks pumped billions into the economy. The industry also benefited from Americans holding back spending on travel and services as the pandemic continued.
These gains have largely been won by big chains because so many independent retailers have gone out of business. More than 440,000 small U.S. companies in the retail and hospitality industries didn’t make it out of the pandemic, according Greg Buzek, president of researcher IHL Group. An estimated $125 billion in sales shifted from this group to the country’s biggest chains in 2020, and that’s continued this year, he said.
“We had this massive transfer of wealth,” Buzek said. “The big just didn’t get bigger, they got considerably bigger.”
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