Not entirely a surprise, but Target (TGT) - Get Report saw same-store sales in the first few weeks of March jump more than 20% from year-ago levels, and surge more than 50% in sales of essentials and food and beverage items.
The retail giant on Wednesday announced that comparable same-store sales for the period between the last week of February and the second week of March rose by 3.8% - a good number by any stretch – as shoppers grabbed their carts and stockpiled essentials as the coronavirus pandemic spurred states and municipalities to issue shelter-in-place orders.
“While Target has maintained its low everyday prices during this period, stronger-than-anticipated quarter-to-date sales have led to gross margin dollar growth ahead of prior expectations,” the company said in a statement.
“However, continued sales declines in higher-margin discretionary categories could result in lower-than-expected gross margin dollar performance for the remainder of the quarter.”
Indeed, like other retailers, Target said it is pulling its first-quarter and full-year guidance, as the impact from the pandemic is simply too difficult to gauge and predict.
The company also said that first-quarter costs will be some $300 million higher than expected thanks to the company boosting pay and benefits for workers as well as a spike in merchandise volume in stores and in its supply chain – as well as “…more rigorous cleaning routines in stores and distribution centers across the country.”
Last week, Target said it would increase the pay of store and distribution center employees by $2 an hour until at least May 2 and give bonuses of $250 to $1,500 to 20,000 hourly employees who oversee store departments.
It said it would also give paid leave for up to 30 days to employees who are 65 or older, pregnant or with underlying medical conditions, if they prefer not to work.
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