• by Thom Forbes , July 14, 2017

If you are among the “doomsday sayers,” as a Fortune hed puts it, predicting the steady and inexorable decline of retail as we knew it, Target has just proven us wrongheaded.

The Minneapolis-based discount retailer “gave investors a nice surprise,” Phil Wahba writes, by reporting “comparable sales were set to increase in this current quarter despite a downcast earlier forecast and that its profit for the period should top its own expectations. The company pointed to improvements in the number of shoppers it is attracting to its stores.”

There’s no one magic bullet behind the surge; it’s a fusillade of planned initiatives beginning to take hold.

“We’re seeing across the country — coast to coast — the business is doing well,” Target spokeswoman Katie Boylan tells Kavita Kumar of the Minneapolis Star Tribune. “So it’s encouraging that it’s not isolated. We’re seeing it over time, across geographies and across the assortment.”

Boylan “added that the company is already seeing some of the benefits of its new strategic priorities executives laid out in February. Target is investing $7 billion into its business over the next three years to remodel 600 stores, including 110 this year; refresh its product lineup with a dozen new brands; and upgrade its technology and supply chain. The retailer also is taking a hit to its margins in order to lower prices,” Kumar writes.

“The new private brands are an answer to shopper feedback that Target's merchandise had grown stale. They mark the imprint of Mark Tritton, who joined the retailer in June 2016 as executive vice president and chief merchandising officer from Nordstrom, and reflect a ‘fresh interpretation of the Tar-zhay that we know our guests love,’ he said on Target’s website,” writes  Forbes contributor Barbara Thau.

“During the first quarter, there were hints that Target's trends were improving, Kantar Retail analyst Leon Nicholas tells  CNBC’s Terri Cullen and Lauren Thomas. “You also have to consider they had set the bar pretty low. ... They had said to look at this year like a transition year.”

Target’s problem “has been waning foot traffic at its stores, not so much web traffic, according to Nicholas. “If I look at what they've been doing [in stores], one greater focus is on private brands, like Cat & Jack,” he says. 

“Target has hoped these exclusive lines will draw in more shoppers, who won't be able to find that merchandise elsewhere. But analysts remain concerned about how Target will turn around its grocery business, which arguably takes up a lot of real estate in stores,” Cullen and Thomas point out.

“Our team is energized and focused on enhancing and modernizing the Target shopping experience, and our guests are responding. The launch of Cloud Island in May was a success, and our team will be rolling out four more exclusive brands across Home and Apparel in the next few months,” chairman and CEO Brian Cornell says in the statement revealing the updated guidance. “We are also pleased with initial results of the Twin Cities rollout of Target Restock, providing next-day delivery of a shopping-cart-sized shipment from an assortment of more than 10,000 essential items.”

Cloud Island is a line of nearly 500 baby products including nursery decor, bedding and bath goods, Nathan Bomey reports for USA Today. In a video embedded in that story, USA Today’s Josh King tells us that Target also “is about to undergo a redesign that will make it easier for shoppers to get in and get out” of its supermarkets. 

By October, some 40 stores will have a separate entrance where shoppers can dash in to pick something up after parking in a special 10-minute parking area. Another separate entrance will be “built for browsers” and will feature curved center aisles that will “encourage shoppers to explore and spend more time in the store.”

Where, by the way, prices will be more attractive, too.

“Despite several headwinds, Target’s strategy of chasing high growth business and expanding its online presence has been allowing it to offset the negative impact of its low performing business. Following a big change in Wal-Mart’s strategy to reduce prices and improve its consumer experience by investing in its stores' appearance and workforce, Target recently said it will invest to ensure it is ‘clearly and competitively priced every day,’” writes Aboutboul Management Consulting on Seeking Alpha. It feels Target, whose share price had plunged 29% this year, “offers a perfect buying opportunity to long-term investors.”

Indeed, Target’s stock rose nearly 5% in trading yesterday and the largest exchange-traded fund to track the retail sector posted its biggest one-day advance since November, Ryan Vlastelica reports for MarketWatch.

There’s nothing like the appearance of a good deal to attract a swarm of buyers.