- Target is expanding its New York City presence with plans for a new small-format store in Times Square, the company announced this week.
- Expected to open in 2022, the 33,000-square-foot store would be the retailer's 10th opened or planned small-format store in Manhattan, which Target describes as a "priority growth market for the company."
- The leased space is on 42nd Street between Seventh and Eighth Avenues.
Target's Time Square store represents a deepening into a market and format that hold a major opportunity for the retailer. The small store has created an inroad for Target into dense, urban markets, which largely remain a frontier for fellow mass merchant Walmart.
Today, Walmart is mainly relying on its e-commerce site Jet to reach urbanites in New York. Jet, though, is receiving far fewer resources these days from its parent as Walmart re-focuses on its flagship website and stores.
Target, meanwhile, has found success with its small-format concept opening in markets not only in cities, but also near college campuses. Target COO John Mulligan told analysts last month that the retailer opened seven small-format stores in the third quarter and another six in November, according to a Seeking Alpha transcript.
Mulligan said then that the company still plans to open 30 small-format stores per year "because they drive guest engagement and deliver strong financial performance, including much higher than average sales productivity and meaningfully higher gross margin rates compared with our larger format stores."
CEO Brian Cornell on the same conference call noted that the "rapid expansion" of its smaller stores was taking Target into new neighborhoods. "Those are guests that were not shopping Target on a regular basis before, they are now," he said, adding that those customers would likely become new loyalty program members as well.
Target has been stealing market share and expanding sales this year, posting banner performances with each quarter. Driving that growth is the retailer's investments in both its private labels and its stores, among other initiatives. While those store investments were met with skepticism by investors when announced in 2017, today analysts note they are driving traffic increases and sales gains at Target.