Target 2004 Annual Report Download - page 4

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At the heart of our strategy is our commitment to delight
our guests by consistently delivering the right combination
of innovation, design and value in our merchandising,
in our marketing, and in our stores. This is the essence
of our “Expect More. Pay Less.” brand promise.
• Within merchandising, this promise compels us to
expand our selection of competitively-priced con-
sumables and commodities and to maintain our
emphasis on the internal product design, development
and sourcing activities that generate quality, trend-
right merchandise in all of our fashion categories.
In 2004, this focus inspired a broader assortment of
food throughout the chain, more rapid growth in our
number of pharmacies, additional investment in our
global sourcing capabilities and the introduction of
new design partnerships and brands such as Boots
cosmetics, Apple iPod, and Simply Shabby Chic.
• Our innovative marketing campaigns excite our guests
with their engaging and distinctive style, their energy
and their sense of surprise. Whether print or broad-
cast advertising — such as “Eat Well. Pay Less.” and
“Design for All”, promotional events — such as “Deliver
the Shiver” or programs that strengthen our commu-
nities — such as “Ready. Sit. Read!” and Target House,
our marketing captures and conveys the true spirit of
Target’s brand.
• And, to preserve the vitality of our brand within Target
stores, we maintain uncompromising standards of
housekeeping, manage our inventory carefully to
ensure in-stock reliability, and offer fast, friendly service.
In addition, we have recently intensified our focus on
speed within our stores — installing Guest Call Buttons
to facilitate requests for assistance, implementing
enhanced cashier training and improvements at
checkout to complete transactions more quickly, and
investing in sourcing and supply chain capabilities to
reduce merchandise lead times and speed product
to our shelves. We also steadfastly adhere to a com-
prehensive remodel program for existing stores and
continue to improve our store format every few years
by incorporating innovative, new design features that
add to the convenience and pleasure our guests’
experience while shopping at Target. Our newest
iteration, P2004, which served as the prototype for all
renovated and newly constructed general merchandise
stores in 2004, has been warmly embraced by our
guests and underpins our optimism about Target’s
future store expansion.
Furthermore, our positive outlook for Target reflects our
belief that incremental opportunities for profitable growth
in the United States remain plentiful. This viewpoint is
strengthened by our disciplined site selection process,
our success in operating a variety of store formats
including freestanding stores as well as mall-based and
multi-level locations, and the potential for additional real
estate availability resulting from consolidation within the
retail industry.
In 2004, Target added 65 net new general merchan-
dise stores and 18 new SuperTarget stores, representing
net new growth in square footage of 8.2 percent. Barring
a substantial real estate acquisition, our 2005 plans for
Target envision a similar rate of expansion. While we
have sufficient capital capacity to grow more rapidly, we
believe that a disciplined program is the best way for us
to preserve both our brand integrity and our expected
financial returns. As a result, we expect to operate about
2000 stores by the end of the decade, an increase in
store count of approximately 50 percent, and we expect
to continue to enjoy meaningful gains in market share,
reflecting both new store growth and increased sales
productivity in existing stores. In light of this opportunity,
our current appetite for expansion outside of the U.S.
remains tempered, and our efforts within the U.S. remain
keenly focused on replicating the brand and financial
attributes of our strategy that have contributed to our
historical success.
Sustaining our advantage requires a dedication to
great design, innovation and continuous improvement.
In order for our brand to remain strong, it must stay fresh
and appealing to our guests. Consequently, we contin-
ually expect more of ourselves and fervently pursue
opportunities that promote superior merchandise design,
enhance value and selection, increase speed and fuel
greater efficiency. For example, in 2004, we significantly
expanded our offering on Target.com to complement the
merchandise assortment available in our stores. We
continued to improve our portfolio of unique and profitable
financial services products, including Target REDcards
and seasonally-appropriate gift cards, to engender
greater loyalty and provide rewards that stimulate