Target 2007 Annual Report Download - page 23

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For 2007, 2006 and 2005, percentage of sales by product category were as follows:
Percentage of Sales
Category
2007 2006 2005
Consumables and commodities 34% 32% 30%
Electronics, entertainment, sporting goods and toys 22 23 23
Apparel and accessories 22 22 22
Home furnishings and d´
ecor 19 19 20
Other 345
Total 100% 100% 100%
Distribution
The vast majority of our merchandise is distributed through a network of 32 distribution centers. General
merchandise is shipped to and from our distribution centers by common carriers. Certain food items are
distributed by third parties. Merchandise sold through Target.com is distributed through our own distribution
network, through third parties, or shipped directly from vendors.
Employees
At February 2, 2008, we employed approximately 366,000 full-time, part-time and seasonal employees,
referred to as ‘‘team members.’’ During our peak sales period from Thanksgiving to the end of December, our
employment levels peaked at approximately 396,000 team members. We consider our team member
relations to be good. We offer a broad range of company-paid benefits to our team members, including a
pension plan, 401(k) plan, medical and dental plans, a retiree medical plan, short-term and long-term
disability insurance, paid vacation, tuition reimbursement, various team member assistance programs, life
insurance and merchandise discounts. Eligibility for, and the level of, these benefits varies depending on team
members’ full-time or part-time status and/or length of service.
Working Capital
Because of the seasonal nature of our business, our working capital needs are greater in the months
leading up to our peak sales period from Thanksgiving to the end of December. The increase in working
capital during this time is typically financed with cash flow from operations and short-term borrowings.
Additional details are provided in the Liquidity and Capital Resources section in Item 7, Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
Competition
Our business is conducted under highly competitive conditions. Our stores compete with national and
local department, specialty, off-price, discount, supermarket and drug store chains, independent retail stores
and Internet businesses that sell similar lines of merchandise. We also compete with other companies for new
store sites.
We believe the principal methods of competing in this industry include brand recognition, customer
service, store location, differentiated offerings, value, quality, fashion, price, advertising, depth of selection
and credit availability.
Intellectual Property
Our brand image is a critical element of our business strategy. Our principal trademarks, including Target,
SuperTarget and our ‘‘Bullseye Design,’’ have been registered with the U.S. Patent and Trademark Office.
Geographic Information
Substantially all of our revenues are generated in, and long-lived assets are located in, the United States.
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PART I