Target sales surge as Americans lean on big box stores
Sales at Target soared 24.3% in the second quarter, more evidence that big box retailers have turned into essential points of supply during the pandemic.
Target, Walmart and Home Depot have all benefited as Americans limit their trips to a few stores and focus on stay-at-home activities, from cooking to do-it-yourself projects and decorating.
Comparable sales — which include sales at stores opened at least a year and online sales — set a record for the three-month period that ended Aug. 1. Online sales surged 195%, while sales at established stores rose 10.9%. Overall, sales spiked Target profits by 80.3 percent in the quarter.
Americans have relied on big box retailers like Walmart, Home Depot, as well as Amazon, since the start of the pandemic. Walmart’s online sales, for example, rose 74% in its fiscal first quarter. That trend accelerated to 97% in the second quarter.
Target gained $5 billion in market share in the first half of the year. Its sales of clothing, which suffered a 20% decline during the fiscal first quarter as shoppers focused on other necessities, moved to double-digit growth in the second quarter.
That’s not a good sign for clothing chains, which struggled before the viral outbreak and are now further in peril. More than two dozen retailers have filed for bankruptcy protection since the start of the pandemic, including names like J.C. Penney, J.Crew and Neiman Marcus. That brings the total so far this year to more than 40 retailers, more than double the number for all of 2019.
The sales surge at Target and other big box retailers came at the expense of thousands of small retailers forced to close in Minnesota and elsewhere in the country during April and May.
"You want everyone to do well and it’s hard as a small business as it is, but having the big box brands open this entire time during the pandemic and us having to shut down for two months definitely took a toll on our business," says Brittany Slusar of Amore & Fede, a family-owned women’s apparel store in Excelsior. She says her store sales are down compared to last year, but finally starting to climb.
"People are ready to do the normal things they did before and they want to support small businesses," Slusar told 5 Eyewitness News. "They want something more unique and different than something you can just find at the mall or Target or places like that."
University of St. Thomas Finance Professor David Vang says small businesses will continue to struggle in the short-term, but is more optimistic about the long-term.
"I’m optimistic because It’s something like three-quarters of all new jobs are created by small businesses," Vang says about traditional economic models. "Long term small businesses will come back."
Slusar is banking on it.
"Support small business, you know, keep the jobs alive," she says. "Keep everything moving along. Support, support, support…that’s what everybody needs right now."