CNBC’s Lauren Thomas reports that Target has signed a lease to open a small-format store on 42nd Street between 7th and 8th avenues. The store, set to open in 2022 at roughly 33,000 square feet, will be Target’s 10th small-format shop in the New York area.
In the past year, Target has expanded its presence in New York with multiple locations, including on the Upper East, Upper West, and Lower East sides.
Target’s strategy has been to move into densely populated areas with stores that are smaller than a traditional big-box store. CEO Brian Cornell said its small-format shops, which can be as small as 15,00 square feet and average 40,000 square feet, are twice as productive as Target’s larger ones.
Target opened its 100th small-format location in August, after announcing a $7 billion investment plan in 2017. The company plans to open 30 small-format locations annually across the country.
Target raised its full-year profit outlook when it reported third-quarter earnings that beat analysts’ expectations. Cornell said the company has cut the costs of handling online orders by fulfilling orders from stock rooms — including from the back of small-format stores — and allowing shoppers to pick up online purchases in stores, which brings down shipping costs.