Target Corp. talked about its plan for the next five to 10 years. The initiatives including spending $1 billion on store renovations, opening smaller stores and expanding into markets including Canada, Mexico or South America. In addition, it is planning on only opening 10 new stores on a net basis in 2010.
But Chairman and Chief Executive Gregg Steinhafel said ahead of a meeting with analysts that Target will apply “the same rigorous financial discipline” in the reforms that have ensured strong returns and prudent use of capital in the past.
In November, the company had warned it could have difficulty meetings analysts’ fiscal fourth-quarter earnings expectations, which were for $1.12 a share at the time. Its third-quarter earnings rose 18%, snapping a streak of eight quarterly declines, as the discount retailer saw profitability improve in both its retail and credit-card operations.
The remodeling, which is meant to boost growth in same-store sales, will include more grocery selections and changes in layout and new merchandise.
For more on the plans, there are stories at the Wall Street Journal, Business Week and the Financial Times.
Beer and Fries
by Elaine Misonzhnik January 22nd, 2010
The No. 2 burger chain in the world might be hoping to become No. 1 with the help of a little booze. Burger King will soon begin offering moderately-priced beer at select locations in the U.S., according to a story in The New York Daily News. Earlier this year, the chain already opened its first so-called Whopper Bar in Orlando, Fla.: a restaurant with a smaller footprint than a regular Burger King joint and limited menu options. That location does not yet serve beer. But a Whopper Bar that is about to launch in Miami Beach, Fla. will. Additional Whopper Bars, all featuring beer on the menu, might be in the works for New York, Las Vegas and Los Angeles.
The move likely arose from Burger King’s desire to expand its customer base in a down economy. It follows in the steps of its rival McDonalds’ earlier move into the coffee market, which has proved quite successful. Coffee, however, is not a very controversial product. Burger King’s new strategy, on the other hand, might very well bring in new clients who’ll be delighted to wash down their burgers with a little ale and if the company puts beer on the menu in only a few, strategically chosen locations this might be a smart move. But if this becomes a practice at most Burger King joints, it has the potential to drive away more customers than it brings in. I think it’s a safe bet that many parents won’t feel comfortable bringing their tots to a place where they might run into a drunk or two. And women might be put off by this as well. It wouldn’t be an issue in the daytime, but if I was craving cheap fast food in the nighttime, I’d probably opt to get it from a place that doesn’t serve alcohol as well.
What does everyone else think? Is this a good move for Burger King?
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