Dive Brief:
- Target opened a new distribution center in Hampton, Georgia, as it continues to grow its footprint as an omnichannel retailer, Gretchen McCarthy, the company’s chief supply chain and logistics officer, said in a LinkedIn post.
- The new facility is Target’s fourth full-service “flow” center, helping it replenish stores and ship products to customers with more speed and efficiency, McCarthy said. The retailer opened its first such facility in New Jersey in 2018.
- Beyond expanding its flow center strategy, Target is also increasing its presence in Georgia, where it now has seven supply chain facilities. According to McCarthy, the newest facility will support more than 400 jobs and allow the company to improve its shipping efficiency in the Southeast.
Dive Insight:
As rival retailers like Amazon and Walmart increase their delivery speeds and customers demand quicker order fulfillment, Target is continuing to bet on its omnichannel strategy to compete.
Target CEO Brian Cornell told analysts during a Q4 2023 earnings call that the retailer planned to add 10 new supply chain facilities to its distribution network over the next 10 years. In addition, Cornell said in a Q1 2024 earnings call that the company is continuing to introduce new sortation centers meant to enhance its last-mile delivery capabilities. Similarly, new facilities, such as the recently opened flow center in Hampton, can upgrade Target’s ability to offer additional delivery options.
Although Target is clearly focused on its supply chain infrastructure as it relates to online order fulfillment, the company remains committed to its physical locations. Earlier this year, the retailer announced plans to open more than 300 new stores in addition to expanding its owned brands and membership rewards program.
“Without huge investments in stores, supply chain, and tech, there is no drive up or order pickup,” Cornell said in the Q4 2023 earnings call.
Target is being strategic with the placement of its locations, particularly its supply chain facilities. As of February, the company had 58 total such facilities with a combined footprint of 61.5 million square feet, according to a securities filing.
Following the opening of the new Hampton plant, of Target’s total supply chain facilities, seven currently reside in Georgia, which “has become an increasingly important location within Target’s supply chain network,” according to McCarthy’s post. McCarthy further added Target has “spent millions of dollars over the last several years expanding our presence” in Georgia.
The Peach State’s significance as a supply chain hub has been on the rise recently. After the Port of Savannah posted record growth in fiscal 2023, the Georgia Ports Authority has continued to report increases in cargo volumes as companies like Hyundai invest in manufacturing plants in the state.
