Target to push electronics to drive sales

By Nicole Maestri

LAS VEGAS (Reuters) - Customers continue to clamor for consumer electronics despite the economic slowdown and Target will boost its offering of hot products, such as flat-panel TVs, to spur sales in 2008, an executive at the discount retailer said on Tuesday.

"We are seeing no resistance to larger panel sizes, better brands, higher price points," Target Vice-President of Consumer Electronics Steve Eastman said in an interview at the Consumer Electronics Show in Las Vegas.

"We don't see any reason to change the mix of product. If anything we're going to continue to reach a little bit further upscale," he said.

Target, the No. 2 U.S. discount retailer behind Wal-Mart Stores Inc, is trying to bolster sales as its middle-income consumers feel the pinch of rising food and fuel costs and a deteriorating housing market.

Last month, Target cut its expectation for December same-store sales, and it warned its December sales were likely to fall "well short of the meaningful improvement" it needed to achieve fourth-quarter earnings-per-share growth.

Target will release its final December sales figures on Thursday.

Eastman said it "was more challenging in the second half than it was in the first half" of 2007.

He said consumers were still buying the electronics products they felt they needed, such as a new TV, but they were showing more restraint when it came to buying that second or third tech gadget they craved.

Despite the tougher environment, Eastman said Target has momentum in its consumer electronics department, and shoppers eagerly snapped up global positioning systems, digital picture frames, video games and flat panel TVs during the holidays.

"We're by no means topped out on LCD TVs," he said.

To build on that momentum, Eastman said Target has revamped its electronics departments to provide more space to sell TVs, and it plans to offer larger televisions in its stores.

It currently does not sell flat-panel TVs larger than 42 inches in its stores.

"The significance of the TV category for us, strategically, is a big deal," he said. "It casts a halo over the entire business for us, so we're pushing that category quite aggressively."

Target is certainly not alone in wanting to drive more shoppers into its electronics aisles. Wal-Mart has spurred sales by remodeling its electronics departments, increasing its selection of advanced TVs, and promoting the brands that it sells in its stores.

Target is hoping that its connection with female shoppers, who it says are the leading force behind many buying decisions, will help it win sales in the more difficult economic environment.