Target is slamming its foot on the accelerator to position its business for the post COVID-19 pandemic spending environment.
The discounter said Tuesday ....I consider Dollar General a discounter, but not Target.
I'm not sure I even consider Walmart a discounter any more.
Likewise, I'm not sure I even consider Schwab a discount broker any more.
Full service, full value would seem more accurate.
Be that as it may, Target announced today:
- it will accelerate new store growth
- 30 - 40 new stores annually, from 30 new openings in 2020
- it will remodel 150 stores this year, and then push that to 200 remodels a year thereafter
- it will open five merchandise sortation centers this year (2021) to serve as delivery hubs
- CAPEX:
- 2019: $3 billion
- 2020: $2.7 billion
- 2021 and going forward for the next several years: $4 billion
Feeling Amazon's pressure much?
Actually, from my perspective. Target is in the sweet spot -- right between Walmart on the very low end for overall shopping experience and Amazon at the high end of overall shopping experience.
Walmart may have the best prices, and it may have absolutely everything one could want, and immediately available in most cases, but the shopping experience is the worst of the three, starting with the parking lot experience.
At the other end, Amazon does not allow the experience of simply perusing new offerings, but as far as the overall shopping experience goes, it cannot be beat. I'm sure there's minimal difference between on-line Target and Walmart shopping experience compared with Amazon, but there's just something about Amazon on line I prefer over e-Target or e-Walmart.
By the way, on a completely different note, this is why, as an investor, faux environmentalists shutting down pipelines no longer bothers me.
The Target story linked above suggested that investors were unhappy hearing about the spending spree and Target shares sold off.
The same thing occurs in the pipeline business. Pipelines are expensive. Every time pipelines are blocked, CAPEX goes down, existing pipelines are move valuable, and free cash flow increases. All good for the investor, even if not necessarily good for the country.
No comments:
Post a Comment