Target Corporation (TGT) is losing its market share to the online competitors and discount stores. Its traditional stores should be able to restrain their costs related to the vast network and make more sales online. Following that guidance, TGT is implementing a large-scale restructuring plan. How successful is it? What’s the share of online sales now and how are the dynamics? In the end, are the efforts TGT is undertaking enough to secure its positions?Even though the company operates in a quite stable retail sector, its revenues declined by 1.1% in 1Q17.
Comparable sales that include all sales, except sales from stores opened in the last 13 months, declined even more – by 1.3%. This figure is indicating falling effectiveness of the existing store network. To understand the real trend we need to observe the whole year’s picture as all the retailers have significant seasonality when approximately 30% of annual sales are generated in the fourth quarter. The figures are also not reassuring as the decline of sales in FY2016 was even more evident (-5.8%).
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