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.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
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.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataSeparately, 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.
