In early 2024, Mary Molina noticed changes in her Target experience, with items often out of stock and less friendly staff. This reflects a trend of fading loyalty to Target, impacting sales. Despite a decline in shares and revenue, Target leaders remain confident in their long-term strategy, citing temporary factors for sluggish sales.
Target’s struggles are attributed to a shift away from unique traits that set it apart, such as eye-catching merchandise and commitment to diversity. Former employees note declining store standards and employee morale, while analysts mention longer checkout lines and fewer staff. Target’s leadership transition looms as CEO Brian Cornell nears retirement.
Cornell took the helm in 2014 after a data breach crisis. Target believes it can rebound by investing in store renovations and opening new locations. In response to recent challenges, Target announced an Enterprise Acceleration Office led by COO Michael Fiddelke. The company also saw the departure of two key executives, signaling potential changes ahead.
Target’s creative approach to merchandise made it a destination for fashion-forward finds at affordable prices. Exclusive brands and collaborations with designers drew customers looking for a unique shopping experience. Target’s transformation into a trendy, chic destination has garnered a loyal following, but recent challenges have raised concerns about the retailer’s future direction. Target’s market cap soared to about $129 billion during the pandemic shopping spree, but has since plummeted to $47 billion. With a focus on discretionary items, Target faces competition and struggles to retain shoppers. The retailer has seen losses in many merchandise categories, signaling a need for strategic rebranding and new partnerships.
To stay competitive, Target has implemented major price cuts on household items and school supplies. The company is also leaning into higher profit revenue streams such as its advertising business and third-party online marketplace. However, competitors like Walmart have launched fashion-forward private brands, leading to market share gains among wealthier households.
Customers are increasingly turning to competitors like Walmart, Costco, Aldi, and Trader Joe’s, as well as newer entrants like Shein and Temu, further challenging Target’s market share. Target’s strategy of offering discounts to move unsold inventory and the impact of tariffs on imported goods are key challenges faced by the retailer. The percentage of Target consumers shopping with Shein has doubled from 5% in early 2021 to nearly 10% in early 2025. Sloppy stores and inventory troubles have plagued Target, with empty shelves and inventory issues affecting customer experience. Digital growing pains have also impacted the retailer, with online sales rising over 200% from early 2020 to early 2025, but challenges in balancing brick-and-mortar and online priorities have led to out-of-stocks and weaker customer service. Target’s recent rollback of key diversity initiatives has also caused a public split with Twin Cities Pride, impacting brand loyalty. In 2023, Target pulled some merchandise from its Pride line due to safety threats faced by employees. The company also rolled back major DEI initiatives in January, following executive orders from Trump. Conservative backlash against Target’s LGBTQ merchandise and support for DEI has impacted sales, with negative reactions hurting revenues.
Target faced criticism for joining Tractor Supply, Walmart, and Meta in backing away from DEI initiatives after Trump’s comments. The company donated $1 million to Trump’s inauguration fund, its first donation to a presidential inauguration in a decade. The backlash to the DEI decision has contributed to declining sales, affecting the company’s image and reputation.
Twin Cities Pride cut ties with Target after the DEI rollback, impacting the nonprofit’s funding. Store traffic for Target has declined, with exceptions around holidays. Customers’ strong emotional connection to the brand has amplified reactions to the company’s decisions. Employees have expressed shock at the sudden change in DEI policies after years of progressive initiatives.
Target’s past support for diversity, including efforts after George Floyd’s murder, contrasts with the recent DEI rollback. The company’s commitment to social justice and diversity goals has been well-publicized. Customers and employees are surprised by the shift in stance, given previous vocal support for diversity from top executives. The challenges Target faces with loyal customers will need to be addressed by current and future leadership. 1. The stock market surged today, with the S&P 500 closing at a record high of 4,400 points. The Dow Jones Industrial Average also rose by 300 points, reaching 35,000 for the first time.
2. The latest jobs report showed a decrease in unemployment rates, with 850,000 jobs added in June. The unemployment rate now stands at 5.9%, down from 6.1% in May.
3. In international news, tensions have escalated between China and the US over cybersecurity concerns. The US government has accused China of cyberattacks on US companies and organizations, leading to increased diplomatic strain between the two countries.
4. A new study has found that the COVID-19 vaccine is effective against the Delta variant, with a 90% protection rate after two doses. This is a positive development in the fight against the pandemic as cases continue to rise globally.
Read more at CNBC
1. Elon Musk’s SpaceX successfully launched 60 more Starlink satellites into orbit, bringing the total to over 1,300. The goal is to provide global high-speed internet coverage.
2. Amazon reported a 44% increase in sales revenue for the fourth quarter, reaching $125.56 billion. This surpassed analysts’ expectations of $119.7 billion.
3. Ford announced plans to invest $22 billion in electric vehicles through 2025, aiming for 40% of its global sales to be electric by 2030.: Target stock and sales fall as CEO Brian Cornell contract ends