Target Corp. (TGT) stated that it will focus more on store renovations rather than new openings in 2010.

The Minnneapolis-based big-box retailer said that it will spend about $1 billion to remodel approximately 340 stores. The company’s renovation program includes expanded grocery offerings, improved store layout, new product assortments and enhancement of its in-store shopping experience in a number of departments Incorporatedluding beauty, home, electronics and video games, aimed at increasing traffic.

Target, which operates more than 1,700 stores, hinted that it expects to add fewer than 10 stores — net of closings and relocations — in 2010 in its existing markets, and increase store openings only in 2011 and thereafter, depending on economic and real estate conditions.

Most leading retailers have scaled back their expansion plans or are slowing down the pace of new store openings since the start of the recession, and are instead focusing on improving store sales productivity.

Target, similar to that of its biggest rival Wal-Mart Stores Inc. (WMT), plans to introduce a smaller-store format, of size 60,000 to 100,000 square feet compared to the current format of 125,000 square feet, to tap the urban markets, where real estate remains a constraint. The test for smaller-format stores is slated to begin in the next few years.

Another opportunity Target is eyeing is the opening of stores in international markets such as Canada, Mexico and/or Latin America beyond the next 3 to 5 years.

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