Target Faces Growth Challenges As Staff Give Thumbs Down To Management Efforts: Report

Target (TGT) is reportedly facing challenges in its turnaround efforts, with employees feeling that the big-box retailer is not doing enough to considerably improve its market position, even as it searches for a new CEO, according to a WSJ report based on internal data and interactions with current and former staff.

About half of the current employees say the efforts are falling short, and 40% replied that they lack confidence in the company's future, according to a company-wide survey of the roughly 260,000 staffers conducted in June. The scores have fallen since last year's survey, and are lower for those staffers at Target's headquarters in Minneapolis, according to WSJ.

Target shares are down over 20% year-to-date, after registering a decline in each of the preceding three years. As of the time of writing, the retail sentiment for TGT on Stocktwit was 'bullish.'

The Target brand has grown by offering fashionable items and slightly trendy everyday goods, which helped it differentiate from low-cost retail chains like Walmart (WMT). It has continued on that strategy, but the results have diminished in recent years, according to the WSJ.

Meanwhile, a rebuke of gay Pride merchandise in 2023, as well as some Diversity, Equity, and Inclusion (DEI) policies earlier this year, hurt sales and angered some investors and workers. Boycotts of Target resulting from the company's stance on DEI weighed on its first-quarter earnings.

In an internal video on Aug. 6, Chief Commercial Officer Rick Gomez acknowledged that the worker survey showed that "we need to do a better job of empowering you to do your best work," according to the WSJ report.

He asked leaders to remove obstacles and simplify the way teams work.

Amid tariff pressure and high inflation, consumers are gravitating toward budget chains, further hurting Target. This comes as CEO Brian Cornell is expected to step down from the role soon.

According to the WSJ report, besides external candidates, COO Michael Fiddelke and Chief Growth Officer Christina Hennington are among the executives being considered for the top role.

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