Retailer to deliver 'affordable joy' through an unparalleled assortment of owned brands and a renewed focus on deal-conscious shoppers
Drive Up Returns rolling out nationwide starting this spring, adding more ease to the guest shopping experience
Company to open about 20 new stores and make updates to about 175 existing locations
MINNEAPOLIS, Feb. 28, 2023 /PRNewswire/ -- Target Corporation (NYSE: TGT) today announced its plans for 2023 at the retailer's annual Financial Community Meeting in New York, emphasizing its focus on offering a differentiated guest shopping experience that will continue to position the company for long-term growth.
The company plans to invest $4 billion to $5 billion this year to expand its guest-centric services, operations network of stores and supply chain facilities, digital experiences and other capabilities. The retailer also shared more about its plans to advance its enterprise efficiency efforts, aimed at optimizing its operations after years of rapid growth.
"Investments in our shopping experience and frontline team have deepened our guests' engagement with Target during the last few years, which is reflected in our continued traffic and sales growth," said Michael Fiddelke, chief financial officer of Target Corporation. "This year, we'll continue investing in our long-term strategic initiatives that propel our market share and profit growth over time. Coupled with our teams' ongoing efforts to scale our business with greater simplicity, we are confident in our ongoing ability to meet the evolving needs of our guests and deliver value for our shareholders."
Delivering affordable joy
This year, the retailer plans to launch or expand more than 10 owned brands, bringing thousands of new, differentiated products to guests at incredible prices. Additionally, the retailer will appeal to value-conscious shoppers with more items starting at $3, $5, $10 and $15. In addition, the retailer will deepen its focus on offering clear, compelling promotions, introduce enhancements to its Target Circle loyalty program and debut a new advertising campaign that celebrates how Target delivers affordable joy.
Launching Drive Up Returns nationwide
Beginning this spring, Target will expand its latest offering, Drive Up Returns, which allows guests to return most new, unopened items within 90 days of purchase from the comfort of their car — for free. Drive Up Returns will be available on purchases made through guests' Target.com accounts. Before heading to their Target store, guests can initiate a return through a guided experience in the Target app. Guests then follow the normal Drive Up process to return their order, and wait in their car for a team member to pick up and complete their return.
In addition to making the Target guest experience even easier, Drive Up Returns brings more efficiency to the retailer's returns process and reduces expenses for mail-in returns.
Opening more new stores and updating existing locations
Target plans to open about 20 new stores in a variety of sizes as it seeks to reach new guests. Many of the new stores will include new design elements that reflect the local community, experiences that highlight new brands, assortment and services, and sustainable features. Target is also making investments in about 175 of its existing stores, ranging from full remodels to the addition of Ulta Beauty at Target or Apple at Target shop-in-shop experiences, or expanded capacity for same-day fulfillment services. These new and updated stores are one way Target brings new partnerships and the latest innovations in fulfillment services to guests while also investing in operational enhancements for its team.
Expanding sortation center network
The company plans to expand its sortation center network from nine to more than 15 locations by the end of 2026, which will expand its next-day delivery capabilities to guests across major U.S. markets. These specialized supply chain facilities allow Target to deliver digital orders faster, more efficiently and at a lower cost, with up to 40% of orders delivered by its last-mile delivery capability arriving next day. Additionally, these facilities remove pressure from Target's stores, giving team members more time to serve guests. This latest sortation center investment will create hundreds of additional jobs in major metro areas offering the retailer's market-leading wages.
Driving efficiencies to fuel growth
Target also expanded upon its newly introduced enterprise efficiency efforts, aimed at simplifying its operations and enhancing its team and guest experience while fueling near- and long-term growth. While this efficiency work will be a sustainable, long-term plan, Target's goal is to achieve $2 billion to $3 billion in cost savings over the next few years.
To stay updated on Target's strategy and initiatives, visit corporate.target.com.
Miscellaneous
Statements in this release regarding the company's future financial performance, planned investments in its business, enhancement of fulfillment and other operational capabilities, new store openings and remodels, potential benefits from the company's enterprise efficiency efforts, and growth of strategic brand partnerships are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the company's actions to differ materially. The most important risks and uncertainties are described in Item 1A of the company's Form 10-K for the fiscal year ended January 29, 2022. Forward-looking statements speak only as of the date they are made, and the company does not undertake any obligation to update any forward-looking statement.
About Target
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at nearly 2,000 stores and at Target.com, with the purpose of helping all families discover the joy of everyday life. Since 1946, Target has given 5% of its profit to communities, which today equals millions of dollars a week. Additional company information can be found by visiting the corporate website and press center and by following @TargetNews.
