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Target Canada rollout to be bigger than any annual U.S. rollout to date

BY Alaric DeArment

MINNEAPOLIS — Target is planning a rollout in Canada that will be bigger than any single year’s worth of its store openings in the United States ever, executives of the company said Wednesday morning in a call with Wall Street analysts to discuss the mass merchandise retailer’s fourth-quarter and full-year 2012 results.

The company plans to open its first 24 Canadian stores in April and have a total of 124 stores in Canada opened this year. A smaller but still significant rollout also is planned for the United States, with plans to open 15 to 20 new stores, including three new City Target stores, for a total of 10 to 15 net new stores when accounting for closings, as well as remodeling more than 100 stores. Chairman, president and CEO Gregg Steinhafel said the five existing City Target stores already had experienced "robust" traffic.

"We expect to open many more new stores this year than in any year in our history," Steinhafel said in the call.

Significant investment also is planned for multichannel retail, as EVP and CFO John Mulligan said the company would invest $2.3 billion in the company’s U.S. retail segment in 2013, with investments in supply chain and technology — including multichannel — set to equal investments in stores.

Currently, mobile purchases constitute more than 7% of sales, with mobile traffic constituting more than 25% of overall digital traffic, as visits to Target’s website accounted for most among mobile users taking advantage of in-store wireless internet. The company also is testing pilot programs in such cities as San Francisco that allow customers to pay online and pick up at the store, or pay at one store and pick up at another.

Another driver of loyalty has been the company’s REDcard and Pharmacy Rewards programs, as REDcard members shopped almost two times more per month than nonmembers and spent two and a half times more. Meanwhile, Pharmacy Rewards members were even more valuable, the executives said, shopping 50% more than nonmembers. Customers participating in the REDcard and Pharmacy Rewards programs shopped more often than those participating in just one of those programs, and the company is planning to extend them and find new ways to drive engagement and sales. The REDcard offers 5% savings on purchases made at Target stores and on the company’s website, while the Pharmacy Rewards program offers 5% off a day of Target shopping after customers fill five eligible prescriptions.

Overall, the company had sales of $22.4 billion, a 6.8% increase over fourth quarter 2011’s $20.9 billion. Sales for fiscal year 2012 were $72 billion, compared with $68.5 billion in 2011. Profits were $961 million for the quarter and nearly $3 billion for the year, with same-store sales of 0.4% for the quarter and 2.7% for the year. The company expects total sales in 2013 to grow 2% and comps to grow 2.7%. The company currently operates 1,778 stores.

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Hispanic consumers often find existing stain-removal tactics ineffective

BY Alaric DeArment

CINCINNATI — Nearly two-thirds of Hispanic consumers have discarded garments ruined by bleach or home remedies up to five times per year, according to a new survey by Procter & Gamble’s Tide division.

The survey, which found that 32% of Hispanic consumers who use bleach for white clothing have experienced garments turning yellow and dingy, while 80% have found that home remedies like vinegar, lemon and salt, and dish soap worked only on some stains. Food was the toughest stain to remove, 56% said, while 21% said dirt was, and 13% said the same of make up. A majority of consumers — including 68% of Hispanics and 63% of non-Hispanics — desire a detergent that can white and brighten fabrics and leave them looking like new.

"Laundry can be a complex process, as consumers not only look to getting their garments clean, but also need to address concerns like stain removal and ensuring their fabrics stay looking new for as long as possible," P&G Tide brand manager Raquel Rozas said. "Understanding what consumers need is at the core of our research and development process to create products and solutions that make the laundry regimen easy and effective, like Tide Vivid White + Bright and Boost, which help remove stains without the damage that chlorine bleach or other treatments can have, while keeping whites looking like new, wash after wash."
 

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Rite Aid tops drug chains in customer satisfaction, as Publix, Target, Costco lead among supermarkets, mass, clubs

BY Alaric DeArment

ANN ARBOR, Mich. — Several pharmacy retailers got top place in a recent consumer satisfaction survey.

A report released Tuesday by the American Customer Satisfaction Index ranked Rite Aid at the top among drug store chains, with a score of 77, a 3% improvement over last year. Walgreens gained 1%, for a score of 76, while CVS ranked 75, a 3% gain. The survey noted that CVS hit a low two years ago due to cost-cutting efforts.

"The improvement in overall customer satisfaction is positive news for consumer demand, but with a caveat that a good portion of the gain comes from federal and local government services," ACSI founder Claes Fornell said. "Looking at the economy as a whole, low inflation, shrinking household debt and pent-up consumer demand are starting to fuel consumer spending. At the same time, however, economic growth will be hampered by a still-tepid job outlook, low wage increases, high gasoline prices and the economic uncertainty created by our politicians."

Publix got a score of 86, a 2% gain, over Whole Foods, which came in at 80. Kroger’s ranking remained unchanged, at 79, while Winn-Dixie increased 4%, to 78. Supervalu, Safeway and Walmart were in the mid-to-low 70s, at 76, 75 and 72, respectively. Costco’s score was unchanged, at 83, while Sam’s Club lost 1%, for a score of 80. Target received a score of 81, while Dollar General got 78.

 

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