Target (TGT) Launches In-House Brand Amid Price War
Target Corporation TGT has come up with its second discount brand Smartly, which will offer more than 70 items at a low price. These items, including hand soap, paper plates, household cleaners and razors will be available at stores and online from Oct 14, 2018. Earlier, it launched another private label brand, Up&Up, in 2009 as part of its pricing strategy.
Target has introduced over 20 unique brands over the past few years, which have strengthened the company’s diversified product portfolio. With the addition of Smartly, Target remains poised on enhancing customer’s shopping experience. This in-house brand will provide more options to consumers within an affordable budget, ranging from 59 cents to $11.99. Notably, most of the items will cost less than $2.
Further, sources revealed that Smartly has already created records by beating Target’s Up&Up brand in terms of pricing. Additionally, Smartly is likely to give tough competition to Walmart’s Great Value brand in laundry detergent and paper towel categories.
This move comes amid the ongoing retail war with biggies like Amazon AMZN, Walmart WMT and Costco COST. In order to stay firm amid the competitive rage, Target has revamped stores, opened small-format stores, accelerated same-day delivery services, strengthened its digital business and introduced celebrity product lines. Also, the company has undertaken aggressive pricing actions to step up in the discount game.
Further, this initiative is anticipated to aid Target’s holiday season sales, which is expected to be strong, given the measures taken by the company in this regard. To top it, Deloitte’s recent holiday sales projection of a 5-5.6% increase hints at happy times ahead for retailers. Holiday sales, excluding motor vehicles and gasoline, are likely to be more than $1.10 trillion between November 2018 and January 2019.
Meanwhile, e-commerce sales are estimated to improve 17-22% to reach $128-$134 billion. This led to retailers hiring more employees to cope with a busy holiday season. In this context, Target intends to employ 1,20,000 associates, reflecting a 20% increase from the prior year.
Without a doubt, such splendid growth endeavors have been a treat to Target’s investors. Markedly, this Zacks Rank #2 (Buy) stock has rallied a whopping 48.3% in a year’s time, outperforming the industry’s growth of 37.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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