Under a new CEO, Target has made major changes to its stores in recent months to reconnect with customers after years of declining sales. With the company’s new strategy, it is seeing an unexpected change in customer behavior as it tries to regain its foothold in retail.
In February, Michael Fiddelke became Target’s new CEO. The management change came after the company struggled to grow sales last year consumer boycotts for canceling its diversity, equality and inclusion policy.
Target major store changes to restore customer loyalty
Shortly after assuming the role of CEO, Fiddelke sent a memorandum employees, noting that Target has « real work to do » to reengage customers.
He divided this mission into four main steps: « leading with sales force, » « improving the guest experience, » « accelerating technology, » and « strengthening our team and communities. »
« We’re making clear choices, investing where it matters most and bringing that strategy to life through our stores, our digital experiences and — most importantly — our people, » Fiddelke said in the memo.
Since launching this new strategy, Target has made several significant changes to the store. In March, it launched a new Baby Boutique section in its hundreds of stores with 2,000 new baby products, including premium brands. It also expanded its Baby Concierge service.
At the moment it is renewal of more than 130 storeswith an expanded grocery selection, modern interior and furnishings, and updates to the self-service checkout. The renovations also include updated facilities and expanded services that support order collection, Drive Up, exchange and return.
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Target’s turnaround is getting an unexpected reaction from shoppers
As Target’s new strategy evolved, the company’s comparable net sales grew 5.6% in the first quarter of 2026. latest results report.
Target’s same-store foot traffic also increased by 7.1% in February, 6.5% in March and 4.8% in April, according to the most recent data. Placer.ai information.
Fiddelke said during a media call with reporters that Target’s baby category sales increased 5 percentage points during the quarter. Additionally, after adding approximately 1,500 new health and wellness products, Target saw double-digit sales growth in this category.
Sales in its toy department also grew by double digits after Target expanded its toy selection to include items under $10 during the quarter.
Fiddelke said Target’s earnings for the quarter were « stronger than expected. »
« When we’ve made changes to categories, we’re seeing guests respond well to those changes, so this is early evidence for us that we’re on the right track, » he said.
He also admitted that buyers continued to face financial pressure in the first months of the year.
« We see a consumer that remains resilient even though they faced a mix of headwinds and tailwinds in the first quarter, » he said.
Fiddelke said Target is planning « the biggest food reset in more than a decade to keep customers engaged. » The company is also starting its multi-year reform in the home and beauty categories.
Target now expects 2026 revenue to grow in the range of 4%, up 2 percentage points from its previous range.
« Despite our updated guidance, we maintain a cautious view given the work ahead and continued uncertainty in the macroeconomic environment, » Fiddelke said.
More grocery news:
Target’s sales growth comes despite the deterioration of US consumer sentiment. Consumer sentiment fell by 7.7 percent in May compared to a year ago University of Michigan Consumer Sentiment Index information.
« Real income expectations continued the decline that began in March, » said Joanne Hsu, director of consumer research at the University of Michigan. opinion.
« About a third of consumers spontaneously mentioned gasoline prices and about 30% mentioned tariffs, » he continued. « Together, consumers continue to feel under cost pressures driven by skyrocketing increases in pump prices. »
As consumers grow increasingly concerned about the economy, they are taking serious measures to hold on to their dollars, especially when it comes to grocery shopping. Survey of Zapp’s consumer search platform last month. This shift in consumer behavior poses challenges for Target and other grocers.
How Americans are changing grocery shopping habits:
approximately 70% of US consumers surveyed price or value as the most important factor when buying snacks and drinks.
Over 80% saw higher grocery costs in the past six months, including over one in four see more than 50 dollars per week.
In response to rising costs 90% are adjusting their buying habits.
Also, 32% said they would buy the cheapest product off the shelves that met their financial needs, regardless of brand.
In addition, 46% of consumers at all income levels coupons or offerswhen they buy groceries, 40% are switching to store brands, 38% buy only essential goods and 34% are buy fewer items to compensate for price increases. Source: Zappi
« Consumers are under real financial pressure, and with nearly a third willing to buy the cheapest option that meets their needs, the era of price increase-driven growth is coming to an end, » said Nataly Kelly, Zapp’s chief marketing officer. press release.
« Overcoming the fragmentation of information and staying in constant contact with consumers frees up the performance challenges that stand in their way. »
