Target Bets Big on Big Box Stores

Most of the news about the largest retail chains in recent months has been about plans for smaller-footprint outlets.

This week, Target disclosed that its expansion plans are focused on its largest stores. CEO Brian Cornell said in an earnings call that the retailer is planning to open 300 stores within the next 10 years, with most of them full-sized.

“We’re excited about the pipeline. It will be more larger size stores, there will be broader food offerings and we’re going to be moving into trade areas where we can pick up incremental volume and market share,” Cornell said.

The plans could double the number of extra-large outlets in Target’s portfolio of nearly 2,000 stores. Most of the Target stores have footprints ranging from 50K SF to 169K SF. According to the company’s Q4 earnings report, 273 Target stores currently are 170K or larger.

At the end of 2022, Target unveiled a store design that was 20K SF larger than its average store footprint of 130K SF. Most of the additional space was deployed to expand the store’s backroom fulfillment space, making it nearly five times larger than the previous design.

The larger stores are configured to fulfill same-day delivery orders. The new stores also incorporate spacious layouts with enhanced lighting and landscaping in the shopping areas.

Minneapolis-based Target said this week it also plans to invest in upgrading its existing portfolio, including full remodels that add Ultra Beauty outlets and support same-day delivery services.

The company not abandoning its small-format store design, which will be aimed at locations in urban areas or near college campuses.

Last week, Macy’s unveiled plans to close 150 underperforming stores—nearly a third of the brand’s stores—primarily large-scale outlets at malls, including a 700K SF flagship store that has been located in San Francisco’s Union Square for nearly a century.

The retailer has made a strategic decision to focus on expanding its smaller-format luxury chain, Bloomingdales, and Bluemercury, a beauty chain. In recent years, Macy’s has been opening smaller stores in strip malls rather than enclosed malls which have seen reduced foot traffic.

Earlier this week, Amazon’s Whole Foods Market debuted a small-format grocery store in Manhattan, announcing plans to roll out the smaller footprint outlets nationally.

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