Target is a large national retailer aimed at satisfying the clothing, homewares and general merchandise needs of Australian families. Our key point of difference is the use of Target branded products. What makes us unique to our customers is the combination of product, value and convenience. Our customer promise is ‘Great Style, Great Value’.

Our revenue in 2008/09 was $3.8 billion. We employ almost 25,000 team members and in June 2009 there were 170 Target and 116 Target Country stores located across metropolitan and regional Australia.

One of the main sustainability challenges facing our business continues to be the safe operation of our stores and distribution centres. We focused our attention during the year on the manual handling of stock in our stores. In October 2008 eight new Safe Manual Handling Guides and a new Manual Handling DVD were produced and distributed to all our sites. Over the past 12 months, we have successfully reduced our Lost Time Injury Frequency Rate by three per cent from 9.34 to 9.05 excluding the Taras Distribution Centre. Taras was included in our figures as of September 2008 and the LTIFR increased to 9.44 as a result. We also recorded an 18 per cent reduction in lost time claims when compared to 2007/08.

During the year, our Future Leaders programme, a new learning and development initiative, was introduced for team members in store management positions. As at 30 June 2009 we have more than 400 team members enrolled in this programme.

The main environmental areas on which we focused our attention during the year were the development of our Environmental Policy, eliminating plastic shopping bags from our stores, undergoing a series of detailed energy audits across our sites and introducing initiatives to reduce our waste to landfill.

During the year we developed a new community strategy which focuses on ‘happy safe families’. As a result we entered into two new key partnerships with The Alannah and Madeline Foundation and St John Ambulance Australia.

Our business requires significant handling of merchandise, and manual handling injuries continue to be our greatest single cause of Lost Time Injuries. During the year we reduced our Lost Time Claims related to manual handling from 124 in the previous year to 112. Our new Manual Handling Awareness programme has been implemented within our stores and offsite reserves and is a key component of our induction programme for team members joining our business.

Our safety statistics are distributed and discussed by the Target Leadership Team each month and also reported to our Board. Lost Time Injuries and other serious incidents are also included in the weekly national store operations conference call.

We also developed a leadership framework to create a common language and criteria for competent performance and behaviours of team members in leadership roles. It provides the foundation for succession planning, recruitment, performance management and learning and development.

A key goal of our business is to improve the promotion and retention of women into senior management and executive roles. As at 30 June 2009, the percentage of women in operational leadership roles was 29 per cent.

This year we introduced a new recognition programme, the Target Rondel Awards, to celebrate outstanding contributions made by team members. The award categories include safety, service, leadership, innovation, sustainability and community involvement.

During this past year we developed a new Environmental Policy to help guide our actions and achieve a more sustainable business. Some of our commitments include:

• reducing our energy consumption and carbon footprint;
• minimising waste generated by our activities and through the lifecycle of our products;
• valuing water as a precious resource;
• providing customers with environmentally friendly product choices where practical;
• creating an environmentally sustainable culture within our business and the community.

Key opportunities supporting these commitments have been identified and are publicly available at www.target.com.au

Reducing waste

In line with our National Packaging Covenant Action Plan we are committed to reducing the use of single-use plastic shopping bags by promoting reusable bags. After a successful trial in South Australia we ceased to offer plastic shopping bags nationally from 1 June 2009. Customers can now choose not to use a bag, bring their own bag or if they wish to purchase one, we have a range available, including reusable bags from $1 and compostable bags from 10 cents.

We were recognised for ‘Excellence in Environmental Leadership’ by the South Australian Government for supporting South Australia’s plastic bag ban and educating the public about alternatives.

Our solid waste is primarily cardboard and plastic material that is collected at our sites for recycling. During this year we diverted more than 14,435 tonnes of cardboard and paper and 564 tonnes of plastic from landfill.

During the year we also implemented an initiative to target a reduction in the number of cartons delivered to our distribution centres by 10 per cent.

Our total greenhouse gas emissions were estimated to be 219,858 tonnes of carbon dioxide equivalent (CO2e), down five per cent on last year, and this equates to 58.04 tonnes of CO2e per million dollars of revenue. The greenhouse gas emissions were largely due to electricity consumption at our sites (approximately 87.8 per cent), synthetic gases used in our air-conditioning (approximately 5.5 per cent) and waste disposed off-site (approximately 3.5 per cent) and flights (approximately 3.2 per cent).

Our main energy use during the year related primarily to electricity consumption due to lighting at our stores. Total energy consumption was estimated to be 818, 871 gigajoules, up eight per cent on last year. Our total energy consumption per million dollars of revenue was estimated to be 216 gigajoules. This energy use is broken down into electricity (86.9 per cent), gas (six per cent) and vehicle fuel use (5.8 per cent) of total energy consumption.

Our new store design now incorporates low energy lighting as trialled at the Mt Ommaney (Queensland) store. The selling floor lights use 24 per cent less energy than the previous standard. The energy saving has been achieved with a lighting design that uses high technology light fittings, orientation of light fittings to emphasise features of the new fit-out and special low energy spotlights to accentuate focal walls and merchandise displays.

As part of Wesfarmers’ commitment to the Australian Government’s Energy Efficiency Opportunities (EEO) programme, we are required to assess the energy use of the business and report publicly on the results of the assessments and potential areas of improvement. To date energy audits have been conducted at 19 sites. A full review of all opportunities and payback periods will be conducted in the third quarter of 2009.

We are unable to accurately measure our water usage as most of our stores are in centres operated by third parties.

In September 2008 a new team member Code of Conduct was introduced which sets common standards of behaviour and conduct. In addition, Target’s Concern Hotline was reintroduced. This provides a confidential telephone service and is an avenue to report breaches of the Code of Conduct and illegal or unethical behaviour. During this past year we also launched a new Equal Opportunity Policy.

We monitor suppliers against our Ethical Sourcing Code. Over the past four years we have made steady progress in understanding the complexity of our supply chain, the key social compliance issues and the training needs of the buying teams and suppliers.

In line with our risk matrix, the focus has been on direct imports from China, India and Bangladesh. This resulted in social compliance audits and a detailed analysis of our general merchandise and apparel suppliers. As at 30 June 2009 audits and audit documentation covered 388 factories supplying Target.

During this past year Coles Group Asia, on Target’s behalf, conducted 22 factory audits, 67 factory audits were conducted by third party auditors and we acknowledged 138 factories through our mutual recognition program.

During the past year five zero-tolerance issues were detected and four factories were deregistered as suppliers due to poor social compliance.

We are not aware of any potential non-compliance during the year with environmental or health and safety legislation. During the year we paid fines of $3,531 related to the management of trolleys.

Our contribution to the communities in which we operate was valued at almost $1 million for the past year. Working with us, our customers, suppliers and team members contributed an additional $1.7 million. Together our total community contribution for the year is valued at over $2.6 million.

Community investment $986,381

Financial support $689,779

Employee time $31,480

Gifts in-kind $265,122

Leveraged support $1,680,646

An internal survey revealed that the cause that most concerned team members was child abuse. All profits raised from the sale of Target red bags now support The Alannah and Madeline Foundation’s Buddy Bag programme, providing children in emergency care with basic essentials. Since the launch in November 2008 we have raised over $233,000 for this foundation.

In October 2008, St John Ambulance Australia conducted free ‘Kids First’ first aid training courses for our customers in six stores in Victoria. In May 2009 we announced a partnership which will enable us to extend this programme nationally. During this past year 388 customers who are carers of children were trained through this programme.

We continued to support Bonnie Babes, raising $62,000 from the ‘Go Ga Ga’ Campaign and donating five per cent of our childrenswear sales on National Babies Day to the Bonnie Babes Foundation.

We were a participating retailer in the Red Nose Day promotion in June raising over $297,886 for the SIDS and Kids Foundation. The annual Uniting Care Christmas Appeal held in our stores resulted in 69,205 gifts and $104,990 in gift cards being donated to local communities throughout Australia.

In addition we contributed over $262,000 in emergency relief, primarily to the Red Cross Victorian Bushfire and the Queensland flood appeals.

Our team members participated in our inaugural Green Week event in early June 2009. Coinciding with our new national bag strategy on 1 June and World Environment Day on 5 June, the event raised awareness of environmental issues at work and around the home.

Environmental initiatives and community activities are now regular columns in our monthly internal publication, ‘Target Talk’. In addition sustainability issues are a regular item on national store manager roadshows and team member briefing sessions.

In support of our customer relations programme we provide an efficient, fair and accessible complaint handling process in accordance with the Australian Standard ISO 10002-2006 for Complaints Handling. The central Customer Relations team received over 46,000 customer contacts during this past year, all of which were recorded and responded to.

We make a significant contribution to economic activity wherever we operate. During this past year we opened 11 new Target stores and five new Target Country stores. Every week our team members process over 1.3 million customer transactions across Australia and last year we paid our workforce over $380 million in wages and salaries.