The Minneapolis/St. Paul Business Journal reports that Target Corp. has acknowledged "disappointing customer traffic in stores during the crucial holiday shopping season."
According to the story, Target now projects that Q4 same-store sales will be down between one and 1.5 percent.
While toy sales were said to be strong, advances were offset by lower-than-expected sales in electronics and groceries, the latter of which continues to be a tough slog for the retailer.
"Target has continued to build its e-commerce business — digital sales were up 30 percent in the fourth quarter — but some critics say that's not an altogether good thing," the Journal writes, because "stronger online sales may be cannibalizing its in-store business."
According to the story, Target now projects that Q4 same-store sales will be down between one and 1.5 percent.
While toy sales were said to be strong, advances were offset by lower-than-expected sales in electronics and groceries, the latter of which continues to be a tough slog for the retailer.
"Target has continued to build its e-commerce business — digital sales were up 30 percent in the fourth quarter — but some critics say that's not an altogether good thing," the Journal writes, because "stronger online sales may be cannibalizing its in-store business."
- KC's View:
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While it is entirely possible that online sales may be hitting Target's physical stores' performance, I think that one thing companies - and stock analysts - need to do is understand that the two cannot be thought of as being in different silos. They have to be considered as being part of one portfolio, one brand ... it may be hard to find a balance if you have a legacy company, but increasingly, that's how you have to see the world. (By the way ... that's exactly the direction in which Walmart seems to be heading ... which ought to be a cautionary note to Target.)
