Target Expands Inventories to Repair Stock-Outs

The retailer built up stocks ahead of sales in the third quarter to ensure more goods were on store shelves

Nov. 24, 2015—Target Corp. is expanding its inventory, but the retailer says it is doing it for the right reasons.

Target improved its in-stock levels by as much as 50 percent for many items in the third quarter, chief operating officer John Mulligan said, addressing a key concern the store chain has said was dragging down sales growth.

The result was a 4 percent increase in inventory in the quarter ending Sept. 30 that was greater than Target’s sales growth of 1.9 percent compared with the same quarter a year ago. Mulligan said the company has increased stocks of fast-turning items in stores to reduce the regularity with which those items need to be replenished.

The company also increased safety stock for some of its “key items,” he said.

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