The Wall Street Journal has a story about how Target and its CEO, Brian Cornell, are facing questions from investors about the upcoming holiday season and whether the company can turn things around after a challenging 10 months.
The year started with Target cutting prices because of an inventory glut, and then having to deal with lower profits because of retail theft throughout the chain. It also suffered a public relations black eye because of how it dealt with Pride Week – its initial promotions were consistent with those of years passed, but a more polarized cultural environment resulted in a backlash that compelled the company to pull back, which then created another backlash among LGBTQ+ employees and customers.
The Journal writes that “shares in Target have lost roughly 60% of their value over the last two years. Larger competitors such as Walmart and Amazon.com are landing more shoppers with inexpensive food and speedy delivery, respectively.
“This week will offer a barometer of consumer spending strength ahead of the crucial holiday season. The Commerce Department issues its monthly report on U.S. retail sales on Wednesday, the same day as Target’s quarterly earnings release. Other major retailers such as Home Depot, Walmart and Macy’s issue their quarterly financial updates this week as well.
“Target has said that holidays have been a relative bright spot of consumer demand and believes shoppers will clamor for goods that are affordable and convenient. Its performance of late includes more shopper visits, a larger digital operation and a fast-growing ad business, said a company spokeswoman. That ‘all speaks to the relevance of Target in meeting changing guest wants and needs during a challenging macroeconomic time period,’ she said.
“Core to Target’s challenge is how people shop in its stores. Target earns most of its revenue from nonfood items such as throw pillows, small furniture and clothing. Spending has slowed on those discretionary items this year, and people have shifted more toward food, services and experiences.”
KC’s View:
Granted, I’ve hardly scratched the surface when it comes to visiting Target stores, but for me, the flavor that overwhelmingly comes to mind when I think about them is vanilla. They’re okay, but just okay, and just okay isn’t enough these days.
I’m sure other folks have had a different experience with Target, and I’d like to hear about it. Because I’m not sure how quickly the company can turn its prospects around by creating a shopping experience with edge – or even if it should. Maybe it is just a waiting game.
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