Posts tagged: strategy

Target is betting on “busy families” to drive its turnaround.

On Tuesday, the retailers’ executives outlined changes to Target’s stores, app, and product selection that they said will improve financial results. At the center of it all are the needs of time-crunched moms and dads, they said.

The plan involves bolstering product selection and customer service in specific product categories, such as baby clothing and care, executives said Tuesday during a presentation at Target’s Minneapolis headquarters.

“Target is not an everything store,” CEO Michael Fiddelke said at the company’s annual financial meeting in Minneapolis. “That’s not what guests want from us.”

Funding many of the changes is an additional $1 billion in investments that Target plans to make this year, including “hundreds of millions” for store staffing and training, CFO Jim Lee said. That’s in addition to $1 billion in capital expenditures that Target announced last year.

The bullseye retailer is in critical need of a return to growth after coming off more than three years of flat or declining sales, Fiddelke said.

Target said on Tuesday that it expects to report net sales growth in each quarter of 2026 after posting a 1.7% decline for its fiscal year that ended on January 31.

Target bets on baby, grocery to get its groove back

The additional investments are meant to free up store employees to provide better customer service, Fiddelke said.

In baby care, Target is expanding its Cloud Island clothing brand and testing “baby concierges” helping customers shop, said Cara Sylvester, Target’s chief merchandising officer said at the meeting.

“This is about earning trust early and strengthening relationships that extend well beyond the baby aisle and beyond the baby life stage,” Sylvester said.

Groceries will also get more investment and floor space in Target’s stores, executives said.

John Conlin, Target’s SVP of food and beverage, told Business Insider that half of the retailer’s shoppers have food in their shopping baskets. That share rises during seasonal occasions and celebrations. The company is also plowing cash into a fresh supply chain to improve its offering of those products.

Target plans to open 30 new stores and fully remodel 130 existing ones in 2026, Lee said.

Those changes are meant to be an inflection point in Target’s strategy. “There will be more newness across the assortment in those stores in the next year than we’ve seen in any year in the last decade,” Fiddelke said.

It’s not the first time that Target has tried to differentiate itself from rivals, including Walmart, by offering a more curated offering.

Over the past few decades, Target partnered with big names in fashion to design some of its clothing and home decor. It also introduced snacks and groceries with sleek packaging that bucked the reputation of store-brand food as budget-focused.

In the last few years, though, some Target customers told Business Insider that the chain lost its reputation as a “nicer Walmart.” Foot traffic declined, and some stores started to look disheveled.

Executives acknowledged many of those shortcomings in Minneapolis on Tuesday — and said their investments are designed to reclaim Target’s old position in retail.

“We used to be strong in a pacesetter in a category like home,” Fiddelke said. “We haven’t been for the last few years.”

Fiddelke, who joined Target as a finance intern in 2003, is a company insider — a potential issue as he tries to execute a new strategy, some analysts who were expecting an outsider to execute the turnaround have said.

On Tuesday, the CEO aimed to sell his decades of experience at Target —and his own lived experience — as an asset.

“Having been in the shoes of a busy-parent household myself, sometimes you just need the very best of Target right to your doorstep,” Fiddelke said.