Target to keep stores open later


Target (NYSE:TGT) plans to keep more than half of its U.S. stores open later starting this month, hoping to capture shoppers who put shopping off until after dark.

TGT's 1,800 U.S. stores typically open at 8 a.m. and close at 10 p.m. on weekdays and Saturdays, and at 9 p.m. on Sundays.

The new extended hours start this month and will be in effect through the holidays, after which they will be evaluated.

According to a recent survey, only 0.3% of Americans shop after 10 p.m. on a typical night.

Rival Wal-Mart (NYSE:WMT) keeps 70% of its U.S. stores open 24 hours a day.

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Comments (18)
  • movies555
    , contributor
    Comments (1440) | Send Message
     
    "According to a recent survey, only 0.3% of Americans shop after 10 p.m. on a typical night."

     

    Uh, so going after that all important niche? Nothing against Target - which I actually like shopping at - but just not sure this is exactly the answer to their issues.
    17 Aug 2014, 07:24 AM Reply Like
  • DC Capital
    , contributor
    Comments (339) | Send Message
     
    Exactly. It's a high opportunity cost for Target and shareholders'. I would like to see management quantify the marginal cost per every extra hour the store stays open and the operating costs associated with staying open later. I would have a hard time believing that particular regions with stores see enough late night business to make this worth wild, especially with the alternatives consumers have to choose from nowadays. I could see additional store hours for Targets located in college towns providing a positive economic benefit, but it's difficult to justify all stores across the board.
    17 Aug 2014, 03:27 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (9690) | Send Message
     
    Is it really a high cost? Most stores have people stocking during those hours and very few additional workers in the form of cashiers. Not sure they make that much money doing this other than keeping people from going to Wal-Mart.

     

    My only problem is that the prime time to shop late is during the summer when your out playing all day and you want to wait until it cools off to run to the store. During the winter, most people want to shop during the daylight hours. Who wants to shop at midnight when its 20 outside?
    17 Aug 2014, 11:44 PM Reply Like
  • pupsuncle@aol.com
    , contributor
    Comments (3) | Send Message
     
    a waste of payroll hrs, which will cost more to stay open than the gain is sales. Security is lax after 8pm, when most of the security guards go home and leaves parking lots vulnerable at late hours for workers leaving at 11pm or later. Usually there is a bare skeleton crew left after 9pm anyway as minores have to clock out by 9pm. At best in large vol. stores there are only maybe 4 workers including the back room for pulls. Target is not Wal-Mart but the new CEO has a background with WM and the parking lots will turn into possible hangouts for teens to gather and be up to no good. So sad!
    17 Aug 2014, 09:32 AM Reply Like
  • richl58
    , contributor
    Comments (49) | Send Message
     
    This has nothing to do we the new CEO, Target started the later hours the fist weekend in August long before the the CEO started.
    17 Aug 2014, 12:52 PM Reply Like
  • raykrv6a
    , contributor
    Comments (3575) | Send Message
     
    Works for me. I like the after 10 pm shopping. Less people and less traffic. Count me in. I spend 700-800 a month at Target.
    17 Aug 2014, 10:46 AM Reply Like
  • PalmDesertRat
    , contributor
    Comments (3766) | Send Message
     
    so you like to go after 10 because nobody is there? that's a ringing endorsement of the new program.

     

    I avoid Target like the plague, now I guess I'll have to avoid it more hours per day.
    17 Aug 2014, 07:39 PM Reply Like
  • raykrv6a
    , contributor
    Comments (3575) | Send Message
     
    Yep, I go later because with less people in the aisles and cashier lines, I can get in and out in 40 minutes.
    17 Aug 2014, 08:04 PM Reply Like
  • Lakeaffect
    , contributor
    Comments (1452) | Send Message
     
    Wow. That new CEO is coming out of the box swinging!

     

    <sarc off>
    17 Aug 2014, 11:04 AM Reply Like
  • Just Some Guy
    , contributor
    Comments (2394) | Send Message
     
    And the places that I do occassionally shop after 10PM are almost always the local grocery that I can walk to, for some obscure item or a desperately needed snack, so the number of people shopping in big-box stores has to be smaller yet.

     

    Still, if Walmart does it - why do they?
    17 Aug 2014, 03:09 PM Reply Like
  • DC Capital
    , contributor
    Comments (339) | Send Message
     
    Target's a great company, but only for its ability to penetrate a wide variety of different target markets (focusing on age groups across the various departments they have). Otherwise, management has a history of mediocre capital budgeting, which has clearly translated into lower profits in periods when other retailers were flourishing. A firm can have the best products in the world, but if it lacks internal controls over the major financing arms of a company, the firm will either run into capital adequacy issued, or in Target's case, the inefficient use of capital. When cash is not put to work, it's simply wasted. It deteriorates the potential value added that could be added to the firm, and shareholders' are merely dragged along for the ride.

     

    Among other things, I'm perplexed as to why management choose to increase store hours. From a cost standpoint, its ineffective and is an action that should be taken down the road after the firms near-term expansions plans are finalized and investors been to see an adequate ROIC from the specific projects. On top of that, Target's financing costs are fairly high (Target's Current WACC = 9.2%). With a ROIC (3.55%) that's lower than its WACC, the economic value added (EVA) is not there. The EVA spread is negative {(ROIC-WACC),(3.55%-9.2%) at -5.65%, and the probability of it seeing further declines continues to go up.

     

    It will be interesting when 2014 year end retail sales are released at the beginning of next year.
    17 Aug 2014, 03:18 PM Reply Like
  • maybenot
    , contributor
    Comments (6628) | Send Message
     
    Smells of quiet desperation. We shall see.

     

    Not long TGT.
    17 Aug 2014, 04:20 PM Reply Like
  • raykrv6a
    , contributor
    Comments (3575) | Send Message
     
    If it works for some Walmart stores, why wouldn't Target do the same for some stores.
    17 Aug 2014, 08:07 PM Reply Like
  • maybenot
    , contributor
    Comments (6628) | Send Message
     
    raykrv6a -- good question. I dunno. Just seems herky-jerky move by management. Not a strategic move.

     

    Just seems like one of those, "Folks, we gotta do something. I know, lets increase hours at a few stores and see what happens."

     

    Maybe it will work. What do I know. I shop there 2-3 times a year. Target to me as a customer is just a big box, with a bunch of red color inside, stuff on the shelves, and disinterested employees. I get stuff and leave.

     

    If your management you gotta "do" something. Name of the game. I would not want to be part of those meetings, especially after the Canada fiasco.

     

    We shall see.
    17 Aug 2014, 08:26 PM Reply Like
  • raykrv6a
    , contributor
    Comments (3575) | Send Message
     
    I'm a late shopper and there are others like me. Target watches Walmart closely with secret shoppers and Walmart does the same. In a tough environment, both companies are willing to try different strategies.
    17 Aug 2014, 08:42 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
     
    I'm learning about the Cash Conversion Cycle and the Working Capital Cycle. Seems like Target has very high cycle numbers, anyone know why?
    17 Aug 2014, 09:41 PM Reply Like
  • whiff
    , contributor
    Comments (953) | Send Message
     
    Last one out, turn out the lights ...
    18 Aug 2014, 06:50 AM Reply Like
  • ls1gto
    , contributor
    Comments (255) | Send Message
     
    Curious as to where other people shop at that try to avoid Target?

     

    I personally like the stores. They are clean, well lit, offer a lot of natural/organic options at a competitive pricing with usually quick check out.

     

    Don't think this move will do much for the bottom line though. Most people that will shop 10-11 are probably shopping 9-10 now.
    18 Aug 2014, 09:22 AM Reply Like
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