Awaiting December comps with breathless anticipation
Target chairman, president and CEO Gregg Steinhafel drew a proverbial line in the sand last month when he noted the company’s same-stores sales performance in December would be better than the company’s modest showing in November.
Actually, what he said was, “For the month of December, our comparable-store sales results will compare the five weeks ending Dec. 31, 2011 to the five weeks ended Jan. 1, 2011. We expect a low to mid single-digit increase in Target’s comparable-store sales for this period, stronger than our November performance.”
That makes the line in the sand 1.8%, a figure that qualifies as a low single digit and wouldn’t appear to be a high bar to clear, especially considering easy prior year comparisons. Comps in December 2010 increased a meager 0.9% and that was on top of a December 2009 increase of 1.8%.
Then again, there are no guarantees in retail, and Steinhafel’s assertion that December comps would surpass the 1.8% gain in November came before much of the country experienced the type of unseasonably warm weather that normally has a negative effect on sales of cold weather categories. Even if Target overcomes the weather issues, surpasses November’s showing and delivers a comp that is more of a mid rather than low single digit number, the magnitude of the increase and whether it was influenced by transaction size, customer traffic, or both, will provide fresh insight into the ability of the ongoing PFresh store conversion program and the relatively young REDcard Rewards program to produce sustainable results in 2012.