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Coming soon: the beneficial effects of dissipating disruption

The most exciting news coming to Target stores this year isn’t some new designer exclusive or enhancement to REDcard Rewards, but rather a return to operational normalcy as the PFresh remodeling program winds down. This phenomenon won’t generate the same publicity as a Jason Wu pop-up store, but the impact on shoppers and sales promises to be greater.

Recall that Target this year had planned to remodel only 230 discount stores to the PFresh concept – well below the upwards of 350 units remodeled each of the past few years. Of the 230 stores receiving PFresh fresh food and general merchandise enhancements this year, Target on Thursday said it would complete 100 of the remodels this month with the remaining 130 units due for remodel opening in two groupings later this year. As a result, by the end of March there will be roughly 1,000 Target stores in the PFresh format with a total of 1,100 stores by year end, and Target will enter 2013 with only a small number of stores remaining that are suitable for the PFresh treatment. It may be a little premature, but this month essentially marks the completion of what has been one of the most extensive and rapidly executed remodeling programs the retail industry has ever seen.

That is welcome news on several fronts as operators will no longer have to deal with the complexity of running stores undergoing extensive remodel projects, and shoppers don’t have to wonder what is going on with “their” store or where merchandise is located. Target did a lot to mitigate disruption of the store experience during remodels with extensive way-finding signage to help shoppers locate departments and colorful floor-to-ceiling graphics, which concealed the extensive work underway to add fresh food. However, the remodel process is inherently disruptive, and even loyal shoppers were inclined to go elsewhere until the project at their store was completed while those who endured the disruption tended to buy less, which negatively affected same-store sales.

Those factors fall away this year as the percentage of stores within Target’s store base that are undergoing a remodel steadily declines and becomes a non-factor next year.

 

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