Target 2011 Annual Report Download - page 40

Comparable-store sales is a measure that highlights the performance of our existing stores by measuring the
change in sales for such stores for a period over the comparable, prior-year period of equivalent length. The method
of calculating comparable-store sales varies across the retail industry. As a result, our comparable-store sales
calculation is not necessarily comparable to similarly titled measures reported by other companies.
Comparable-store sales are sales from our online business and stores open longer than one year, including:
• sales from stores that have been remodeled or expanded while remaining open (including our current store
remodel program)
• sales from stores that have been relocated to new buildings of the same format within the same trade area, in
which the new store opens at about the same time as the old store closes
Comparable-store sales do not include:
• sales from general merchandise stores that have been converted, or relocated within the same trade area, to
a SuperTarget store format
• sales from stores that were intentionally closed to be remodeled, expanded or reconstructed
Comparable-Store Sales 2011 2010 2009
Comparable-store sales change 3.0% 2.1% (2.5)%
Drivers of change in comparable-store sales:
Number of transactions 0.4 2.0 (0.2)
Average transaction amount 2.6 0.1 (2.3)
Units per transaction 2.3 2.5 (1.5)
Selling price per unit 0.3 (2.3) (0.8)
In 2011, the change in comparable-store sales was driven by a slight increase in the number of transactions
and an increase in the average transaction amount, reflecting an increase in units per transaction and a slight
increase in selling price per unit. In 2010, the change in comparable-store sales was driven by an increase in the
number of transactions and a slight increase in the average transaction amount, reflecting an increase in units per
transaction largely offset by a decrease in selling price per unit. The collective interaction of a broad array of
macroeconomic, competitive and consumer behavioral factors, as well as sales mix, and transfer of sales to new
stores makes further analysis of sales metrics infeasible.
Our U.S. Credit Card Segment offers credit to qualified guests through our branded proprietary credit cards:
the Target Visa Credit Card and the Target Credit Card (Target Credit Cards). Additionally, we offer a branded
proprietary Target Debit Card. Collectively, we refer to these products as REDcardsᓼ. Beginning October 2010,
guests receive a 5 percent discount on virtually all purchases at checkout every day when they use a REDcard at
any Target store or on Target.com.
We monitor the percentage of store sales that are paid for using REDcards (REDcard Penetration), because
our internal analysis has indicated that a meaningful portion of the incremental purchases on our REDcards are also
incremental sales for Target, with the remainder representing a shift in tender type.
REDcard Penetration 2011 2010 2009
Target Credit Cards 6.8% 5.2% 5.2%
Target Debit Card 2.5 0.7 0.4%
Total Store REDcard Penetration 9.3% 5.9% 5.6%
Gross Margin Rate
Gross margin rate represents gross margin (sales less cost of sales) as a percentage of sales. See Note 3 of the
Notes to Consolidated Financial Statements for a description of costs included in cost of sales. Markup is the
difference between an item’s cost and its retail price (expressed as a percentage of its retail price). Factors that
affect markup include vendor offerings and negotiations, vendor income, sourcing strategies, market forces like
raw material and freight costs, and competitive influences. Markdowns are the reduction in the original or previous
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