Dive Brief:

• Most of Target’s upcoming new stores in the next year or so will be established in urban areas, the company says.

• The company says it will be opening 11 new stores in 2016 and four new stories in 2017: three in Philadelphia, three in New York City, two in Los Angeles, and one in Chicago, among others. Just one suburban “big box” style store will open, in the Allentown, PA, area; most of them will be smaller than 40,000 square feet.

• Last year, the company did away with specialized names “CityTarget” and “TargetExpress,” rebranding every store to just “Target” regardless of size, merchandise mix, or location. 

Dive Insight:

The latest United States Census found that America's urban population increased 12.1% from 2000 to 2010, outpacing the overall growth rate of 9.7% in that time. Many cities have worked to bring commerce back to their inner cores; public transit and other city conveniences make urban areas more appealing to many Americans. All that means that more people, especially but not limited to young people, are opting to live, and continue living, in cities. 

This trend is leading chain retailers, including Target and Wal-Mart Stores, to reverse their tendency to invest so much in property located in far-flung areas of communities, and develop smaller stores in more urban areas instead. 

Still, for many smaller towns and more rural areas, big box stores remain convenient. And the infrastructure in those areas is still set up to accommodate them. And in fact, for the most part, those stores remain easier to establish because land availability, logistics and expense are more complicated in more urban areas.

Wal-Mart CEO Doug McMillon in October noted that “globally we know growth will disproportionately come from middle- and upper-income households in the years ahead,” yet Wal-Mart’s core customer base has long been lower- to middle-income and rural-to-suburban. And while Wal-Mart has boosted its string of its smaller Neighborhood Market and Express (recently rebranded also as “Neighborhood Market”) stores, they’re not yet doing much for the bottom line, according to analysis this year by Goldman Sachs. 

“The suburbs are basically saturated with retailers,” Patrick L. Phillips, chief executive of the research nonprofit Urban Land Institute, told the New York Times. “But it’s easy to develop stores in the suburbs, and hard to develop stores in cities.”