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Target to Open More Stores

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In an effort to further strengthen its operational roots, Target Corporation (TGT), the operator of general merchandise and food discount stores in the United States, announced the opening of 3 new stores in Chicago, New York and San Francisco.

The move reflects the company’s strategic initiative to expand in regions where it generates strong sales. Moreover, the San Francisco store is the extension of its smaller-format stores called CityTarget.

Target Corporation, in order to tap the urban markets where real estate remains a constraint, plans to introduce smaller-format stores called CityTarget, similar to that of its biggest rival, Wal-Mart Stores Inc. (WMT).

Earlier, the company unveiled its first three smaller format stores in Los Angeles, Seattle and Chicago. We believe that the approach will help the company to augment its sales by enhancing its accessibility to the country’s thickly populated urban regions and space-crunched cities.

The company has announced its plan to open 10 Target stores in 2013, which includes the smaller format stores in Los Angeles, Portland and San Francisco.

Moreover, the company for the first time announced that it will allow its shoppers to match the prices being offered by online retail giants. Consumers will have the facility of compare prices being offered by Amazon.com Inc. (AMZN), Wal-Mart Stores Inc.’s Walmart.com, Best Buy Co. Inc.’s BestBuy.com and Toysrus.com.

According to the price matching policy, the customer will not find any discrepancy in pricing if an item is purchased between November 1st and December 24th from Target stores. However, if the item costs less at Target.com or in a local competitor’s printed ad, Target will provide items matching the price.

Currently, we have a long-term ‘Neutral’ rating on the stock. However, the company, which competes with Costco Wholesale Corporation (COST), holds a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating.

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