Ever find yourself wondering why checkout lines seem so long at Target (TGT) stores?
Belus Capital Advisors analyst Brian Sozzi noticed that at various Target stores, the center three checkout lines usually seem to be packed. Regardless of the time of day, Monday through Sunday, even during “off-peak hours,” the center three checkout stations appear to have “holiday season-like lines.”
The concentration of shoppers in the center checkout lanes might be because Target stores deliberately keep the outer lanes closed during some times of the year due to diminished post-holiday season store traffic. Sozzi, however, suspects that the practice could also be simple marketing tricks.
At many Target stores, high-margin apparel items are located near checkout areas. Longer checkout lines put customers closer to those items, increasing the chance of last-minute sales.
Forcing customers into the center three checkout lanes makes them pass enticing displays for items they didn’t plan to buy, but could be tempted to. Marketing tricks like increasing checkout wait times may also prompt some customers to rush back to the merchandise aisles to pick up items they’d previously decided not to buy.
TGT stock slipped slightly in Tuesday morning trading.
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