(Columbus, OH; Sept. 24, 2002; Business Wire) In the next five years, Target could add 500 more stores and double its sales volume.

In a recently released report entitled "A Moving Target," Retail Forward, a global management consulting and market research firm specializing in retail intelligence and strategies, expects that Target's future growth will come not only from continued new store expansion, but improving performance at existing stores. Retail Forward anticipates Target will continue to increase its market share in core areas such as apparel and home, newer categories such as food, and currently under-penetrated categories including consumer electronics, decorative home improvement, toys, and sporting goods.

"A Moving Target," authored by Sandy Skrovan, Vice President of Retail Forward, examines the moves the discount retailer is likely to make over the next five years to capitalize on what it does right, optimize it and extend it.

"Target has hit the bull's eye with its differentiated offer, winning brand strategy and merchandising strengths," Skrovan states. "The company has developed a compelling strategy and business model that allows it to co-exist in the crosshairs of archrival Wal-Mart," she adds. "Clear opportunities exist for Target to grow same store sales, drive more shopper visits, increase average ticket, and make its existing space more productive."

Taking Aim

In the next five years, Retail Forward expects Target to be an even bigger and more critical competitor and customer than it is today. In five years, the company's apparel business could nearly double to $15 billion, its home textile and housewares business could exceed $10 billion, and the company could become a top ten US food player -- significantly raising the bar for grocery retailing if it can find the right recipe.

According to Retail Forward, likely growth opportunities for Target exist in the following areas:

*New Store Expansion. Enough market opportunity remains in untapped and under-penetrated geographic pockets for Target to more than double its store base in the US. In five years, Target could be a $65 billion retailer with over 1,500 units.

*Global Opportunities. At projected growth rates, Target should saturate the US in the next 5 to 10 years. In order to sustain the lofty growth rates expected by shareholders, Target likely will need to begin exploring cross-border opportunities in the next five years. Canada seems the most likely target.

*Extend Unique Positioning Strategy and Strengths. To drive same-store growth, Target will need to apply its trademark marketing and merchandising skills to more categories and more consumer segments, gaining share of wallet and retaining shoppers as they progress through different lifestages and lifestyles. "We expect Target to continue down the path of identifying other categories and markets where its unique brand management skills and brand cachet will give them license to grow, expand, and improve productivity," Skrovan states.

*Drive Traffic and Shopping Frequency. Accelerated SuperTarget expansion is expected to drive store traffic, increase shopping trips, and foster cross-shopping behavior. In a slow-growth food environment, Target will need to grow through market share incursion, attracting shoppers away from traditional food channels. "Target has its work cut out in trying to develop a stand-out food offer that is not based on driving down prices, like its supercenter predecessors. But if it can get the formula right, the food business could represent a real coup in Target's future growth potential," according to Skrovan. "It could give supermarkets a real run for their money."

*Hone Differential Advantages to Build Customer Loyalty. To keep its guests coming back for more, Target will continue to cement relationships through initiatives like multi-channel operations, guest relationship management, and smart card technology. "Only time will tell if Target's initiatives to put more distance between itself and the rest of the pack will achieve increased traffic, add-on sales, return on investment, and economic value added," Skrovan adds.

Raising the Bar

Target will continue to raise the bar across the competitive landscape. "Expansion efforts and the extension of Target's core strengths and strategy across more categories will wreak havoc for many retailers, driving smaller, weaker players out of business and forcing consolidation and innovation among the remaining competitors," states Skrovan. "Suppliers could have as much as 10 to 15 percent or more of their business on the line with Target," she adds. "Cooperation, collaboration, and customization of brands will be key elements in working with Target -- all translating into more complex business, brands, and relationships to manage."

Retail Forward, Inc. (www.retailforward.com) is a globally focused management consulting, market research, and executive development firm specializing in retail intelligence and strategies. The company's syndicated research and executive development program known as the Retail Forward Intelligence Program, provides members with an authoritative perspective on the retail and consumer products industries. Retail Forward's new special report, "A Moving Target," can be purchased online at www.retailforward.com.