PFresh delivers traffic gift

The most extensive year of store remodeling activity in Target’s history winds down this month just as the company and the entire retail industry embark on what promises to be an intense battle for holiday shopper traffic.

Unlike prior years, Target has a new weapon in its arsenal, as Christmas 2010 marks the first time there are a meaningful number of PFresh stores in the company’s total store base of 1,752 units. The company recently completed the remodeling of 55 stores in the Chicago market and another 35 stores in the Washington D.C. area, combined with remodels completed earlier in the year, giving the company a total of 340 stores remodeled to the PFresh format this year. In addition to units remodeled in 2009 and 10 new stores that opened this year, Target will end 2010 with a total of 450 PFresh units.

Thanks to the addition of fresh foods and expanded consumable offerings at PFresh stores, Target has the opportunity to gain increased traffic from existing customers and potentially attract new customers during a holiday season where the significant growth can only be achieved by gaining share from competitors as total holiday spending is forecast to grow in the low single digits. Meanwhile, the fact that the company has taken a market-by-market approach to the extensive remodeling effort means that once the process is completed the company is able to leverage its marketing budget and really make some noise about the changes in a way that gives it something new and different to talk about as shoppers are thinking about where to shop this holiday season.