A rebound awaits in key categories

Target is the beneficiary of a perceived quality gap relative to Walmart, and that typically helps it in head-to-head comparisons where such categories as apparel and home are concerned. Unfortunately, consumer decision-making is seldom so linear, and Target has a slew of other retailers against whom it must compete, and recent sales results suggest it has work to do. Target has reported weak (flat or declining) results for its apparel and home categories and did so again in February. However, such companies as TJX, Ross and Kohl’s, which appeal to the same value-oriented shoppers as Target, produced solid gains. TJX said its February same-store sales increased 10%, Ross produced an 11% increase and Kohl’s was up 3.7%. Also producing gains were such competitors as Nordstrom, Macy’s and JCPenney, which serve customers squarely in the crosshairs of Target’s “expect more, pay less” value proposition. Macy’s reported a better-than-expected increase of 3.7%, and Nordstrom topped analysts’ views with a 10.3% increase. JCPenney’s same-store sales rose 1.2%, which was also better than expected.