Target debuts more small formats

Walmart may have backed away from its small-store format but Target (NYSE:TGT) is forging ahead, opening four new small-format city stores this week.

The retailer is opening stores in Philadelphia and Allentown, Pennsylvania; Queens, New York; Brookline, Massachusetts; and Chicago.

The Allentown location is the company's only supercenter, with the rest ranging in size from 16,000 to 31,000 sq. ft. In fact, Allentown is the only supercenter planned for all of 2016, according to the New York Post.

The fall openings are more of the same, with nine new units planned in places including Brooklyn, New York; New York's Tribeca neighborhood; Cupertino, California; Rittenhouse Square in Philadelphia; and Chicago's Hyde Park.

Target typically opens stores three times a year: March, July and just before the holiday season. While the grand opening schedule rarely changes, the size and style of stores most certainly has.

The smaller formats vary in design – some are multilevel, some are in older buildings adapted for reuse – and merchandise, as the company becomes more skilled at creating hyper-local assortments.

Stores near college campuses are carrying some different items than those in downtown settings. The Forest Hills location opening in Queens this week serves a large Jewish community and will carry more kosher food, while a location opened last year in downtown Chicago serves hot food and alcohol to young professionals and tourists alike.

These stores are indicative of Target's growth strategy going forward – one that differentiates the stores from competition, opens up a wider variety of location choices and generates higher profits. Morningstar analyst Ken Perkins said in a research note, "Sales productivity levels are double those of traditional stores and the product mix is more attractive."

For more:
- see this New York Post story
- see this Target store opening schedule

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