Target Seeing Very Weak Traffic: Landes

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Aug. 21 (Bloomberg) -- Bloomberg's Poonam Goyal and Cowen & Co.'s Faye Landes discuss Target's second-quarter sales with Deirdre Bolton on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

For customers pulling back.

They are expanding its e-comm erce reach.

I will start with you.

We spoke this morning after the numbers came out.

You are my first call.

What did you make of the numbers?

You said this is symptomatic of the general slowing, the same thing we heard from walmart.

The biggest take away is the consumer environment is slowing.

Traffic is falling which is the culprit of missed sales at target and more guidance.

You said target was -- traffic was down.

I do not know if where that stacked up as far as what you were expecting.

This is the current -- third consecutive quarter we have seen out of target and walmart.

They are not going to shop.

It is important to get people into the stores.

Investors were expecting better traffic from target.

This is on a much better traffic compare.

They measure transaction and this quarter is much easier than it was last order.

This was a very weak traffic number.

You told me there was one potential bright and if you want to look for one.

The price paid per unit when higher.

There were less people in the high -- in the stores.

If you look at the ticket, it was up which was good.

When they get people at the stores they are shopping.

The other thing you want to focus on is the red card membership.

20%. that is a pretty good number.

Until 2011 they were outsourcing their e-commerce jim is on -- to amazon.

They're trying to get people engaged online.

What do you think about strategy?

It is a good strategy.

Every retailer has to have an online strategy.

It is amazingly made it so far without it.

They made it so far as a retailer.

It is not clear if they made it online.

It does not appear their online business is very large.

They talk about their online sales being up double digits.

That can be 10.5% or 11% or 99%. it is a big range to be in.

They probably would have shared the number so they still have would to chop in e- commerce.

It does not sound like an incredibly robust result.

They did say mobile sales or sales through mobile were up triple digits and that is nice.

That is where a lot of e- commerce is going.

There is a lot of how-to videos and that gives them more access to a different group of people.

Targeting the younger customer is what they want.

The younger customer it does not have the most money to spend.

They have cited lower income for the demographic especially the teens.

We have many canadian colleagues here so we cannot talk about target without talking about canada.

This is an important piece of the puzzle.

This has to work for them in canada.

56 more to open this year.

What do you make of what they are doing their and how optimistic are you that this is going to be the growth opportunity there hoping for?

The company was quite explicit and said they had to refine some things.

They have to refine some things in canada.

One of the things they talk about is there soft goods, apparel and home are selling quite nicely.

Versus walmart which is more consumables.

It sounds like the consumable business is quite weak.

That is unfortunate.

First of all because consumables is what drives traffic.

People need to milk , a gallon or liter of milk.

When we think that after two years plus in the market, getting everything set up, they did the sellers acquisition 2.5 years ago.

They were studying the market.

One would hope they would understand but the consumer needs.

They talked about breaking consumer's habits and it is difficult to break a consumer habit of any sort.

It is difficult for individuals for -- to break habits.

For an outside company to say we're breaking habits is quite a challenge.

This text has been automatically generated. It may not be 100% accurate.


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