Key Target Metrics
- Target unveiled a new format store (22165 Farm to Market Rd 529 in Katy, TX) this week that is ~150K square feet, or ~20K square feet larger than its average store. Target expects almost all 30 of its planned new stores and more than half of the 200 remodels in 2023 to incorporate elements of the new design. In 2024, all remodels and new stores will feature the majority of the new store design elements. While this larger format is intended to be the main focus over the next few years, Target will continue to open stores of all sizes.
- The larger size is to allow for an expanded food & beverage section as well as the company's exclusive brand partnerships. Notably, the new layout includes a backroom fulfillment space that is 5X that of traditional stores of a similar size, enabling it to support ongoing digital growth. Walmart and Lowe’s are similarly doing this. Recall, stores fulfill ~95% of Target's digital orders and same-day services now account for more than 10% of overall sales.
- When we looked at the location through Placer.ai, we were struck by three things (below). First, this is a total greenfield location and Target is the first in. Second, this fills in Target’s presence on the western side of Houston and the trade area’s household density is similar to the other Target stores in the market. And third, the market per Spatial.ai: Proximity is heavily food & beverage indexed (relative to Texas), affluent, and Gen-X. That market composition ties in well with the category emphasis of the store as described in the press release.