Target plans to invest $5 billion next year to reverse its ongoing sales slump, company executives announced this week. The move is part of a turnaround strategy outlined by incoming CEO, Michael Fiddelke, who emphasized that the company's top priority is returning to growth. He said the retailer would invest $1 billion on top of earlier commitments —for a total of $5 billion, "a 25% year-over-year jump," per CNBC— aimed at addressing complaints about messy stores, empty shelves, and a lackluster product lineup. The company is also looking to better use technology, including through a collaboration with OpenAI that will allow users to browse Target products through ChatGPT, per the Wall Street Journal.
The company—which also recently announced plans to cut 8% of its corporate workforce in its largest layoff in a decade—reported its 12th straight quarter of weak or declining sales on Wednesday after seeing shares fall 35% this year. In the latest quarter, comparable sales fell 2.7%, with fewer shoppers visiting stores and those who did spending less. Net sales for the quarter slipped 1.5% to $25.3 billion, while net income dropped 19% to $689 million. With the holidays approaching and consumers continuing to pull back on discretionary purchases, Target says it has cut prices on 3,000 everyday items and rolled out exclusive merchandise, such as trading cards and Stranger Things merchandise. Still, it expects sales to fall again in the fourth quarter, per CNBC.
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