Target Corp. tallied 17.2% comparable sales growth for the 2020 holiday sales period, with online transactions driving the bulk of the gain.
Target reported Wednesday that comp-store sales climbed 4.2% year over year for November/December, while digital sales jumped 102% for the period. The Minneapolis-based mass merchant said the overall comp-sales increase was fueled by a 4.3% uptick in traffic and 12.3% growth in average ticket size.
The robust holiday performance reflected strong quarterly results by Target throughout 2020, as the company continues to fine-tune an omnichannel strategy of positioning its nearly 1,900 stores as “hubs” to fulfill both in-store and digital purchases — a model appreciated by U.S. consumers amid a surge in the COVID-19 pandemic.
“The momentum in our business continued in the holiday season, with notable market share gains across our entire product portfolio,” Target Chairman and CEO Brian Cornell said in a statement. “We’re very pleased with our results, and the strength of our performance is a reflection of the tireless work of our team to support our guests through a safe, convenient and inspirational experience. Throughout the holidays, we delivered joy for holiday shoppers while focusing on safety, adjusting promotions to reduce crowding while delivering easy, contactless fulfillment options through Drive Up and Shipt.”
Combined, same-day services — Order Pick Up in-store pickup, Drive Up curbside pickup and Shipt home delivery — generated 193% digital comp-sales growth in November/December, according to Target.
Drive Up led the way with a more than 500% sales increase, followed by Shipt at over 300% growth. Meanwhile, shoppers made 5.1 million fresh grocery orders via Order Pick Up for their holiday meals, the retailer said.
Customers bought 150 million items via Drive Up and Order Pick Up in December, nearly four times more than a year ago. Target said one day during the month also saw 6.5 million items fulfilled through Drive Up and Order Pick Up, the most ever in a single day. The company added that Cyber Week (starting on Cyber Monday after the Thanksgiving holiday weekend) was the company’s “biggest yet” as digital orders, site traffic and Drive Up orders hit record highs.
Including store-originated sales, same-day services and ship-from-store orders, about 95% of November/December sales were fulfilled by stores, Target said, noting that three-quarters of Americans live within 10 miles of a Target store.
On the merchandise side, Target said it gained market share in all five of its core categories during the the November/December holiday period. The home category generated the strong growth, with comp sales up in the low-20 percent range. Hardlines was right behind with low-20s gains, including mid-20s growth in electronics. The retailer said food and beverage comp sales rose “in line with the company average,” and the beauty and essentials category posted growth in the low teens. Apparel comp sales increased in the high-single digit range.
Target added that it drew 3.3 million new members to its Target Circle loyalty program, which enables shoppers to earn extra rewards.
“We’ve seen continued strong sales trends in the new year,” Cornell stated, “and as we turn to our 2021 plans, our team is focused on continuing to build on the guest engagement and significant market share we gained throughout 2020.”
So far, retailer holiday sales look to be on the upside, according to Jefferies analyst Stephanie Wissink. Besides Target, she cited strong results at Costco Wholesale, which reported overall comp-sales growth of 13.4% for November and 10.7% for December.
“In looking at select retailers, including several softlines companies, holiday sales generally have performed in line or better than expectations, with many noting a strong January, benefiting from [federal COVID-19] stimulus,” Wissink wrote in a research note on Wednesday. “Based on strong retail trends so far, we believe the holiday was likely relatively strong for Walmart and BJ’s Wholesale Club as well, and look for additional stimulus to also benefit.”
The National Retail Federation (NRF) reported last week that retail sales for the first 11 months of 2020 — excluding automobile dealers, gas stations and restaurants — rose 6.6% year over year, with November sales up 8.8%. NRF said that growth put the holiday season on track to meet its forecast of a 3.6% to 5.2% sales gain. The U.S. Census bureau is slated to report December retail sales on Jan. 15, which will give a fuller picture of the holiday sales performance NRF added.