Tar­get sales soar as US shop­pers splash free cash

The Daily Telegraph - Business - - Business - By Si­mon Foy

AMER­I­CAN re­tail gi­ant Tar­get posted a 24pc in­crease in sec­ond-quar­ter sales, the big­gest rise in its 58-year his­tory, as con­sumers in the United States spent their ex­tra cash on clothes and video games rather than travel and eat­ing out dur­ing the pan­demic.

The record surge was driven by on­line sales, which tripled dur­ing the pe­riod, while in-store sales also re­mained ro­bust. Over­all like-for-like sales jumped 24.3pc in the three months to the begin­ning of Au­gust, smash­ing an­a­lyst ex­pec­ta­tions of an 8.2pc in­crease, while to­tal rev­enue rose 24.7pc to $23bn (£17.4bn).

De­mand has re­mained strong since lock­down re­stric­tions were eased, Tar­get said, with con­sumers us­ing the $1,200 stim­u­lus cheques is­sued to most Amer­i­cans un­der the gov­ern­ment’s Covid re­lief plans to pur­chase items such as tablets and beauty prod­ucts.

On Tues­day, ri­val Wal­mart said that the gov­ern­ment hand­outs lifted sales in its sec­ond quar­ter, but the ben­e­fit faded by July.

In con­trast, Brian Cor­nell, Tar­get chief ex­ec­u­tive, said: “The stim­u­lus was a fac­tor, but even as it waned we saw strong com­pa­ra­ble sales growth in June and July … and we are off to a very solid start in Au­gust.”

Dis­cre­tionary cash that would usu­ally go to travel and eat­ing out was be­ing spent on re­tail as a re­sult of the pan­demic, he said.

“The big­gest change we saw from the first quar­ter to the sec­ond … was ex­cep­tional growth in in-store shop­ping in an en­vi­ron­ment where many Amer­i­cans were turn­ing to dig­i­tal to ful­fil their needs,” Mr Cor­nell added.

The strong per­for­mance out­shone Wal­mart, which posted solid re­sults thanks to a sim­i­lar rise in ecom­merce sales. Both re­tail­ers were al­lowed to stay open dur­ing the height of the cri­sis be­cause they also stock gro­ceries and toi­letries.

How­ever, Tar­get echoed its big­ger ri­val in say­ing that the start to the key back-to-school sea­son had been slow due to un­cer­tainty around when stu­dents will go back to class­rooms.

Tar­get shares jumped more than 12pc in New York to close at a record high above $154.

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