Target Corp. Chief Executive Officer Brian Cornell is thinking small when it comes to expanding the big-box retailer.
Cornell envisions eventually opening hundreds of smaller “flex-format” stores that could be a major part of Target’s future growth, he told reporters Wednesday during the company’s fall national meeting at its Minneapolis headquarters.
Target has opened 23 smaller stores in major cities like Chicago and Philadelphia and has plans to add nine more this year and at least 16 in 2017. Typically taking up less than 50,000 square feet, the smaller stores enable the company to expand into downtown areas where a big-box footprint isn’t possible. The shops also create pickup points for online orders, helping Target compete with Amazon.com Inc.
The stores don’t have the same product selection as a typical Target and are more targeted at the demographics of a specific market. For example, the retailer’s store in New York’s Tribeca neighborhood, opening next month, will have a focus on baby and kids merchandise to meet the needs of the area’s plentiful family population, Cornell said.
That’s “unlike our store at the University of Maryland, where there is very little baby, not a lot of toys, and a big focus on beauty and apparel,” he said.
Rival Wal-Mart Stores Inc. abandoned a strategy of opening smaller stores earlier this year, opting instead to focus its attention on its supercenters and grocery-store-sized Neighborhood Markets. Unlike Target, many of Wal-Mart’s smaller stores were in rural areas.