Target expanding toy section with the addition of 100 Disney shops

Target Corporation (NYSE: TGT) has announced that it will add 100 more Disney shops within its outlets in a bid to help drive traffic ahead of the holiday season. Currently, the retailer has around 1,900 stores across the US, and it started opening Disney (NYSE: DIS) shops at various locations three years ago. Notably, with a tripling of the number of shops, over 160 Target outlets will offer Disney-branded merchandise ranging from costumes to toys by the end of 2021.

Target converting its outlets to mini-malls

Somehow Target is looking to turn its stores into mini-malls through partnerships to allow customers to access a range of goods under one roof conveniently. So shoppers can order at Starbucks café, get prescription or vaccination at CVS Health, find displaces of Levi Strauss denim and Apple gadgets under one roof.

The expansion comes as the holiday season nears, which is an important period for toy sales. Recently, Macy's (NYSE: M) announced an expansion of its toy offering by signing an agreement with Toys R Us. The deal will see Macy's open Toys R Us shops within its over 400 department store chain outlets and online marketplace.

Retail strategy analyst Steve Dennis indicated that Toys R Us closure put the market share up for grabs, with several retailers looking to leverage the opportunity. As a result, this has intensified competition between retailers such as Target, Amazon, and Walmart, which turned toys into an attractive merchandise category for Macy's.

Disney shops to help target raise toy section’s price point

Dennis said that the Disney shops would help Target stand out and raise the toy section's price point. But, he added:

According to Target Chief Growth Officer Christina Hennington, toys are a growth category for the retailer, and in Q2, they showed considerable momentum. She indicated that for the quarters ended July 31, the company's toy sales were up in the low 20% range YoY.

Besides Disney, the retailer also indicated that it would team with toy retailer FAO Schwarz. Target will have a 70-piece exclusive toy collection with FAO Schwarz that includes Paw Patrol and Barbie items.