Target’s total comparable sales jumped 22.9% year over year (YoY) to $23.88 billion in its fiscal Q1 2021 (ended May 1, 2021)—accelerating from the prior quarter and the same period last year, when the metric grew 10.8% YoY. Meanwhile, the retailer’s digital comparable sales climbed 50% annually to $4.37 billion, a major slowdown from Q4 2020 (peak holiday shopping season) as well as Q1 2020, when digital sales skyrocketed 141% YoY as consumers flocked online at the pandemic’s onset. Pandemic conditions also improved during this period compared with last year, which may account for the deceleration in Target’s same-day digital services (order pickup, Shipt, and curbside pickup): The metric grew 90% YoY in Q1 2021, down from the 278% surge it posted last year.
The retailer is seeing more optimistic consumers who are eager to return to their pre-pandemic lives, according to Target CEO Brian Cornell. His remarks coincide with a recent McKinsey survey, which found that 40% of consumers report being consistently optimistic about an economic recovery post-pandemic. These sentiments might’ve helped fuel Target’s growth in Q1. Rising COVID-19 vaccinations—which have reduced caseloads, making it safer to shop in-store again—along with the cash injection from March stimulus payments may have also supported growth. Improving pandemic conditions could also explain Target’s digital sales growth deceleration in the period, since consumers’ reliance on ecommerce may have lessened as they started leaving home more.
Looking ahead, Target’s recent innovations can help spur more sales growth.