Target plans to add five distribution centers around the country over the next two fiscal years to support future growth and expand its distribution infrastructure. The plan includes the addition of holding capacity near U.S. ports, in what Target says is an attempt to add flexibility and speed in the portions of the supply chain most affected by external volatility, reports Chain Store Age.
The company also plans to work with suppliers to shorten distances and lead times in the supply chain., along with taking pricing actions to address the impact of what it terms “unusually high” transportation and fuel costs, reports CSA.
"Target's business continues to generate healthy increases in traffic and sales, despite sustained volatility in the macro environment, including shifting consumer buying patterns and rapidly changing operating conditions,” said Brian Cornell, chairman and CEO of Target Corp. “Since we reported our first quarter results, we have continued to monitor external conditions and have determined the necessary actions to remain nimble in the current environment. The additional steps we are announcing will ensure that we deliver for our guests while driving further growth. While these decisions will result in additional costs in the second quarter, we're confident this rapid response will pay off for our business and our shareholders over time, resulting in improved profitability in the second half of the year and beyond,"
Minneapolis-based Target Corp. operates nearly 2,000 stores across the U.S. and the Target.com e-commerce site.