Environmental Analysis
General merchandise stores are defined as retail stores that sell a number of lines, such as dry goods, apparel and accessories, furniture and home furnishings, small wares, hardware, and food (Levine, 2000). General merchandise stores are subdivided into three major groupings: department stores, variety stores, and miscellaneous general merchandise stores. Each of these three groupings has different characteristics. Target Corporation is one of the most popular discount retail companies in North America. First opened in 1962 in Minneapolis, MN, strives to sell trendy retail merchandise at discounted prices. Target sells a variety of retail goods, including home furnishings, clothing, toys, electronics, kitchen appliances, infant care products, pharmaceutical goods, optical goods, and personal care products (Mittal, 2007). The Target Corporation has been a constant contributor in the retail market industry by posting better than industry sales increases every year beginning in the 1990's (Levine, 2000).
There are numerous macroeconomic indicator variables that affect the retail industry. Some of which include the disposable personal income, consumer confidence,
interest rates, gross domestic product (GDP), inflation, unemployment, the expansionary policy and consumer price index. The Bureau of Labor Statistics defines the consumer price index (CPI) is a measure of the average change in prices over time in a market basket of goods and services (2007). If a company has to have an increase in prices, they will pass the costs onto the consumer. The below graph represents the change in Consumer Price Index over the past several years:
The graph shows that the consumer price index has not been steady ove ...