US: Target to slow PFresh conversions, Q4 profits drop
Target CEO Gregg Steinhafel said the group only plans to covert 230 stores to the PFresh format in 2012
US retailer Target Corp. has said it will pull back on the conversion of its stores to its PFresh food format this year, as it booked a drop in fourth-quarter profits.
Speaking on the firm's earnings call yesterday (23 February), CEO Gregg Steinhafel said the group only plans to switch 230 stores to the PFresh format in 2012. This is down from the 400 outlets converted last year, it confirmed.
Steinhafel said the chain had initially revamped higher-volume stores in urban and suburban locations and that it was now working on lower-volume stores.
"Over time, as we completed and we fill back into those market, we just believe that this cadence is a more appropriate cadence as we go forward, as we go forward," he added.
"Secondly, we're working on a lower cost investment on some of these, and so we're just looking at extending out the programme a little bit."
As well as being apparel and mass merchandise stores, Target's PFresh format offers fresh food.
Separately, Target recorded a 5.2% drop in fourth-quarter profits for the three months to the end of December. Operating profit also dropped, by 4.4% to $1.70bn. Sales, however, climbed 3.3% to reach $20.94bn.
For the full year, net profit edged up 0.3% to $2.93bn, while operating profit rose 1.3% to 5.32bn. Sales amounted to $68.46bn, a 4.1% increase on the prior-year.
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