Target 2005 Annual Report Download - page 5

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more rapid growth of SuperTarget stores and an expanded
food offering in our general merchandise stores. The result
of these efforts in 2005 was the debut of new collections
such as Fieldcrest and Thomas O’Brien, the launch of
ClearRx and the introduction of new owned brands including
Choxie gourmet chocolates and TruTech electronics. In 2006,
we remain focused on delivering both differentiation and
value through new initiatives which include GO International,
Smith & Hawken, Time to Play, as well as significant category
reinventions in beauty and intimate apparel.
Our commitment to innovation and superior design also
extends to our stores. As with our merchandising, we strive
to balance form and function in creating a store environment
that is both aesthetically pleasing and easy to shop. While
our format evolves slightly each year as we identify
improvements in presentation, signing and adjacencies, we
consolidate these opportunities and incorporate more
dramatic changes every few years through the development
of a new prototype store design. Our current prototype,
P2004, has produced positive results both for our guests and
for Target, and to date, we have incorporated key features
of this design into nearly half of our store base. We expect to
increase this penetration to approximately two-thirds of our
stores by year-end 2006 through the completion of new
construction, comprehensive remodels and ongoing efforts
to upgrade existing stores.
We remain optimistic about our opportunities for growth in
the United States. As we add to our store base, we continue
to believe that our disciplined, carefully planned expansion
program is the best way for us to preserve both our brand
integrity and our expected financial returns. As a result, our
2006 plans envision a net increase in new Target square
footage of about 8 percent, similar to our growth in 2005.
To sustain this growth over time and continue to replicate
the Target brand, we are equally committed to providing a
desirable workplace for our team members — just as
committed as we are to delighting our guests with exciting
merchandise, unexpected marketing, fun-to-shop stores
and outstanding service. In particular, we strive to create a
workplace in which our 300,000 team members feel respected
and valued for their unique talents and perspectives, believe
they have opportunity for career advancement and trust that
their performance is evaluated and rewarded fairly. We
believe this commitment to our team members allows us to
continue to attract and retain a diverse team of dedicated,
energetic and capable individuals who proudly represent the
Target brand. It also ensures that Target has the necessary
skill and experience within our organization to support our
future growth and remain a leader in the fast-paced and
highly-competitive environment in which we operate.
Our commitment to our Target team members extends
beyond the workplace to the communities where we all live
and work. For the past 60 years, we have supported
programs in education, the arts, social services and other
vital partnerships that enrich the lives of our guests and team
members. Today, our funding of national and local nonprofit
organizations totals more than $2 million each week. In
addition, many of our team members donate their time and
knowledge to programs where they have specific expertise.
We feel proud that our efforts can positively affect lives and
contribute to the improved health and safety of our local
communities. We also believe that by strengthening the
markets where we operate, our commitment to ‘giving back’
enhances the long-term performance of Target as well.
Our long-term performance underscores the power of our
strategy and its execution. For more than a decade, we have
been focused on growing by design—leveraging our design
capabilities to deliver affordable, stylish merchandise for our
guests, while building new stores at a measured and profitable
pace—and this approach has produced outstanding results.
By embracing innovation, discipline, integrity and speed
throughout our entire organization, Target has generated a
total annualized return to shareholders of 25 percent over
the past 10 years, well above the S&P 500 and most of our
retail competitors. Sustaining a high level of performance
requires that we continue to expect more of ourselves;
it requires that we strive to become the best by delivering
more value, in total, than any other company for our guests,
our team members, shareholders and communities.
We are extremely proud of our recent performance—the
attainment of more than $50 billion in annual sales and the
many accomplishments this milestone represents—and we
are excited about the opportunities and challenges that lie
ahead. As we look to the future, we believe that Target is
well-positioned to build on our past success and generate
profitable market share growth for many years to come.
Sincerely,
Bob Ulrich, Chairman and Chief Executive Officer
Board of Directors Change During the past year, Michele Hooper,
Managing Partner and Co-Founder of The Directors’ Council retired from
our board of directors. We thank Michele for her many contributions during
her fifteen years of service. Also during the past year, we welcomed to our
board Mary Minnick, Executive Vice President and President, Marketing,
Strategy & Innovation of The Coca-Cola Company.