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Target bets on bigger stores

The new large-format stores will be about 20,000 square feet larger than the average Target.

MINNEAPOLIS — Target is betting that when it comes to your shopping experience, "bigger is better."

The Minneapolis-based retailer outlined its updated store layout plan on Thursday, which includes opening some new large-format locations as well as new design features in existing stores.

Starting in 2023, more than half of Target's 200 full-store remodels and about 30 new stores, which will vary in size, will include elements of the updated design. Beginning in 2024, all remodels and new locations will "feature the majority of these reimagined store design elements," according to Target.

So what's new?

The larger-footprint stores will be around 150,000 square feet, about 20,000 square feet larger than the average Target, and have expanded backroom fulfillment spaces to support online and digital orders.

“Our new store layout is bigger than our previous stores, and that extra space and optimized layout ensures our team can offer the very best of Target to our guests, whether they’re shopping online or in our stores,” John Conlin, senior vice president of Target Properties said in a statement.

New design details included increased natural light and "natural elements" like reclaimed wood and plants, and more "community-focused" designs and native landscaping.

As part of its goal to reach net zero emissions by 2040, Target says it will install CO2 refrigerators and install rooftop solar power where possible, and the retailer will update employee spaces and modernized offices for staff when they're not working on the sales floor.

"I think it's an extremely bold strategy because most retailers are going in the other direction of having less of physical presence and relying more on internet sales," said Dave Vang, professor of finance at the University of St. Thomas. "Perhaps part of this is trying to make the work environment more favorable for employees because it is harder to hire people. Another thing they're trying to do is maybe be more in compliance with environmental and social justice issues by trying to make their stores more environmentally friendly and so forth."

Target's big announcement comes months after the company reported solid sales in the fiscal second quarter but plunging profits after Target slashed prices to clear unwanted inventories of clothing, home goods and more in the wake of a post-pandemic spending shift.

Surging inflation and backups to the global supply chain hit Target even earlier in 2022; Target's net income fell roughly 52% from a year ago to $1.01 billion, or $2.16 per share, in the quarter that ended April 30. 

Even with the focus on larger stores, Target says it will continue to open and operate small-format stores across the country.

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