Online sales at Target more than doubled during the first quarter.
NEW YORK — Online sales at Target more than doubled as the pandemic put millions in lockdown during the first quarter, revealing further the critical role big-box stores played in getting supplies to an immobilized population.
The Minneapolis company reported this week that comparable-store sales, which include online purchases, rose 10.8% for the three-month period that ended May 2.
That was fueled by a 12.5% jump in the number of items customers bought with each trip to the store as families made major restocking runs, but fewer of them.
“Last quarter was unlike anything I have ever seen,” Target’s CEO Brian Cornell told reporters on a conference call Wednesday. “It was intense. It was volatile. It was stressful for our guests and for the country.“
The pandemic has widened a growing rift between big-box retailers that deftly followed consumers online, and those, particularly mall-based clothing chains, that have struggled. Walmart this week reported a 74% surge in U.S. online sales for the first quarter. Same-store sales rose 10% at its U.S. stores.
J.Crew, Stage Stores, Neiman Marcus and J.C. Penney filed for bankruptcy protection this month.
A yearslong campaign by Walmart and Target to challenge Amazon.com online was, as it turns out, a dry run for a pandemic.
Target had already transformed its 1,800 stores into distribution hubs, putting it in a better position than even Amazon.com to keep supplies flowing. Its stores were directly involved in supplying goods for 80% of online sales.
Same-day services, such as curbside pickup at stores for things ordered online, nearly tripled.
The company has 5 million new users on its website, and 2 million have begun relying on Target’s services like curbside pickup for things ordered online. Target picked up market share in all five of its merchandise categories, Cornell said. Sales of items like furniture and electronics surged 20%. It was the same for groceries.
As with other retail companies operating in a pandemic, costs soared as well. Target spent and additional $500 million on things directly related to the outbreak. It’s bumped up hourly pay for workers by $2. It has now extended emergency pay for those workers to July 4. Target also spent money to sanitize stores and warehouses, new protections for workers an signage for customers to ensure social distancing.
Cornell said those costs will be the new reality going forward.
“There is going to be a premium on creating a safe sanitized shopping environment,” he said. Shopping while minimizing human contact is the new normal, he said, referring to drive-up and curbside pickup.