As a regular Target shopper who has covered the retail industry for over 30 years, I’m not convinced that the chain’s politics or dropping of its diversity, equity, and inclusion (DEI) language has led to its current sales drop.
Traditionally, boycotts rarely work. While liberals being angry about the DEI issues and conservatives being mad about the chain’s Pride merchandise likely contributed to its sales drops, a visit to the chain’s stores suggests new CEO Michael Fiddelke has much bigger problems to solve.
“Target customers have soured on what they see as untended and messy stores with lackluster merchandise,” the Associated Press reported.
That mirrors the experience I have had across multiple visits to a handful of Target locations over the past year. Shelves were picked over, clothes were mostly available in less-popular sizes, and many products were out of stock.
When customers visit a retailer and the items they want aren’t in stock, they often go elsewhere or shop online, which can erode trust in the brand over time.
Social issues certainly haven’t helped the chain, but its problems run deeper than that.
“The strategy needs correction and execution needs improvement,” Gerald Storch, Target’s vice chairman between 1993 and 2005, told Reuters. “You see long lines, hyper-promotional deals, and a loss of focus on value.”
Target CEO sets new priorities
Fiddelke shared an open letter to employees and customers when he took over the position on Feb. 2. In it, he named four priorities.
- Leading with merchandising authority by curating with conviction — bringing together design, style, and value in a way only Target can.
- Elevating the guest experience by making every store visit and digital interaction easier, more inspiring, and more welcoming.
- Accelerating technology to remove friction, enable our teams, and create more personalized, joyful experiences for guests.
- Strengthening our team and communities by investing in our people, building future-ready skills, and growing alongside the communities we serve.
As one of his first moves as CEO, Fiddelke cut about 1,800 corporate jobs. Some of the money from those cuts will be invested in improving the chain’s stores.
The CEO acknowledged the inventory issues.
“This past quarter, the on-shelf availability of our 5,000 top items, the ones for which being in stock is most important to our guests and which represent 30% of our total unit sales saw a more than 150 basis point improvement compared to this time last year. But even with this meaningful progress, I want to emphasize that we have much more room to improve, and we’re not slowing down,” he said during the chain’s third-quarter earnings call.
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The company is increasing its capital expenditures from $4 billion last year to $5 billion in 2026.
“We’re formulating plans for next year that will bring greater changes to key floor pads throughout the store, which will accelerate both our merchandising authority and our experience,” he added.
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Analysts are mixed on Target’s changes
Retailwire’s Braintrust debated Fiddelke’s letter on the popular website.
“The big problem with Target is that its failures in execution have weakened the entire value proposition. Merchandise isn’t as compelling as it once was, many stores are in disarray, and friction in the shopping journey has driven customers away. So, yes, these priorities largely hit the nail on the head,” GlobalData Managing Director Neil Saunders wrote on Retailwire.
Bob Phibbs, an experienced retail leader and Retailwire Brain Trust member, thinks Fiddelke has missed the mark.
“None of those. First is associates. He was the OPS (operations) guy for decades. How this wasn’t #1 is a cause for concern? The crews are dispirited and damaged. Everything is about them, then the merch, then the customers. Everything else is chump change,” he shared.
Cathy Hotka, who describes her job as “connecting insiders in retail,” thinks Target has made a bigger mistake.
“Target’s fortunes cratered when they abandoned DEI. DEI is NOT a sop to the undeserving, but a conscious policy of looking for truly great candidates, beyond just white men. The overwhelming majority of Target shoppers are women, and they’re very unhappy about this (not to mention numerous minority shoppers). This company has really lost its way,” she posted.
Carol Spieckerman, a recognized retail authority, took a more optimistic view.
“I was mildly encouraged by Fiddelke’s remarks, mostly due to what wasn’t included. His lack of defensiveness and acknowledgement that heavy work is ahead marked a departure from Brian Cornell’s usual tone. Store experience is critical to Target’s success, if only because Target remains a store-centric retailer,” she wrote.
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