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Again with the low-to-mid single-digit increases


Target reported a 3.3% same-store sales increase for October and a similar figure could be in order for November as the company again provided guidance calling for a low-to-mid single-digit increase.

The October gain was driven by an increase in average transaction size, offset by a slight decline in transactions, which could be further indication that the company’s loyalty programs are gaining additional traction. After all, such programs as REDcard Rewards weren’t created to attracted huge numbers of new customers, but rather to gain a larger share from those who already favor Target, so a slight decline in transactions isn’t a cause for concern, yet.

“We’re pleased with Target’s third-quarter comparable-store sales performance. We believe our unique merchandise assortment, exceptional everyday prices and superior shopping experience are more relevant than ever in these challenging economic times,” Target chairman, president and CEO Gregg Steinhafel said in a statement. “We’re confident that our merchandising and marketing plans position Target to drive strong results throughout the holiday season and beyond.”

The company’s comp guidance for November is noteworthy because unlike October when the company was lapping a prior year increase of 1.7%, the prior year comp gain from November 2010 is a more substantial 5.5% increase. Surpassing that figure will be a tall order although not unattainable considering that economic conditions this holiday season are nearly identical to last year. That means shoppers will be in deal mode, on a budget and receptive to early season promotions due to limited resources. At least that’s how the season played out last year and was a key reason why Target produced an anemic 0.9% comp increase in December 2010. The morale of the story is if Target manages to meet or exceed its sales plan for November, don’t look for the momentum to extend into December as the early season strength will simply be an indicator that shoppers are blew their budget early.

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