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Target’s New CEO Has a $6 Billion Plan to Turn the Tide
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Good morning. Today, leaders at a once-bright retail chain spell out the steps they’re taking to charm shoppers once again.
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Target CEO Michael Fiddelke speaks at Target's Financial Community Meeting at Target headquarters in Minneapolis. Tom Baker/Associated Press
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Target’s $6 billion path to redemption with shoppers (and investors) will require all the pieces to fit.
The beleaguered retail chain yesterday detailed its strategy to turn things around with a multi-billion outlay on stores, merchandising, employees and tech. That also includes more spending on marketing and AI, executives said, but not in a vacuum:
“Investment in brand marketing, investment in technology and AI, that goes hand-in-hand with great experience,” new CEO Michael Fiddelke said during an investor presentation at company headquarters.
Nor will that investment be one and done, CFO Jim Lee said:
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“We’re planning to reinvest $1 billion into our P&L this year. This includes hundreds of millions of dollars to support additional store labor and training along with expenses related to a planned increase in new store openings, growth and remodel projects, and our most ambitious plan for in-store merchandising transitions in more than a decade. In addition, we're stepping up our spending on brand marketing and technology, including AI.
I want to be clear, these investments are not one-time costs, but reflect an ongoing step up in spending levels.”
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Other key points in the project to make Target an attraction again include:
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more groceries that shoppers can’t find elsewhere,
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a more frequently updated clothing selection to better keep up with trends
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and a better-edited bedding section, with 10% fewer SKUs.
Turning the bullseye into a flywheel: Executives say all that work will pay off beyond the immediate aisles at hand—boosting high-margin areas such as Target’s retail media network and online marketplace, for example.
“It might seem ironic, but as the digital leader, when I hear investment in stores, I also hear investment in digital,” Sarah Travis, chief digital and revenue officer, told Modern Retail:
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“Stores are the heart of the company. It’s where guests build the first relationship point with Target, and when they have an enjoyable experience in the stores, they’re going to walk into our digital platform and download our app and transact more often there, as well.”
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Content from our sponsor: Deloitte
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New M&A Market Opportunity May Reshape Deal Strategy for 2026
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M&A optimism is on the rise, amid increasing opportunities for dealmaking among small and midsize organizations, according to a survey report. Read More
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Sponsorships Under Scrutiny
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A deal struck in 2021 secured Verizon’s right to use NFL branding in its advertising. Jeff Speer/Icon Sportswire/Getty Images
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Verizon has been scrutinizing hundreds of millions of dollars in spending on sports and music sponsorships as part of its push to reduce costs across the company, The Wall Street Journal’s Patience Haggin and Suzanne Vranica report.
In recent months, the telecommunications company discussed pulling back on or even exiting its high-profile National Football League sponsorship, according to people familiar with the matter.
That decadelong deal, struck in 2021, was worth more than $1 billion, those people said. It made Verizon the league’s official 5G network and secured the right to use NFL branding in its advertising.
Discussion about revising the agreement has since cooled, as amending the contract isn’t easy and exiting the deal would likely include having to pay a penalty fee, the people said.
“We’re looking at every expense and investment across the business, sponsorships included,” a Verizon spokesman said. “Withdrawing from the NFL partnership was not a goal and not the plan.”
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“There’s the straw man of, ‘Well, it failed at this one thing, therefore it’s all stupid.’ ”
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— Iraklis Pappas, global head of AI at Colgate-Palmolive, on some attitudes toward AI at work. When an ad agency last year presented unpolished AI images to demonstrate that the tech wasn’t ready for center stage in advertising, he took over screen sharing to display a newer, far more capable model.
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20%
Price cut for young people buying next year’s Epic Pass from Vail Resorts. The pass will cost $869 for “young adult” skiers and snowboarders ages 13 to 30, compared with $1,089 for older adults.
$249
Price of the gut-health test for babies from Tiny Health, part of a fast-growing business focused on infants’ microbiomes
11.4 million
Viewers for the new “Scrubs” reboot in the five days following its premiere, counting both Nielsen data for the ABC broadcast and Disney figures for streaming on platforms including Hulu.
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The community where marketing leaders drop the corporate speak and share what’s actually happening. The WSJ CMO Council unites leaders from the world’s most influential brands including Adobe, Audi, Google, IBM, Intel, Johnson & Johnson, Meta, Taco Bell, P&G and Verizon.
Tap into the connections and WSJ intelligence that move careers forward and separate the prepared from the scrambling.
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Meta Platforms has signed a multiyear AI content licensing deal with News Corp that will pay the Wall Street Journal owner up to $50 million a year. [WSJ]
Warner Bros. is working on a “Game of Thrones” movie. [Page Six]
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Seattle-based Starbucks plans to open a corporate office in Nashville as part of its efforts to expand in the central, southern and northeastern U.S. [WSJ]
“All I tried to do was go to the store!” How Terrell “Lucky” John became TopDog Law’s passionate, unpredictable voice on the radio. [Washington Post]
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