Target Corporation

• Date Founded: 1962
• Industry: Discount stores
• Corporate Headquarters: Minneapolis, Minnesota
• Type: Public

Overview

Target Corporation is a chain of big box general merchandise stores, headquartered in Minneapolis, Minnesota. Measured by sales, it was the seventh-largest retailer in the nation in 2024, after the likes of Wal-Mart , Amazon, Costco, Kroger, and others, according to the National Retail Federation. By early 2024, Target operated 1,956 stores throughout the United States, with locations in all fifty states and the District of Columbia.

The first Target store was opened in 1962 by Dayton-Hudson Corporation, which owned department stores. Target was so successful, however, that in 2000 the entire company was renamed the Target Corporation.

Target’s logo is a red dot in the middle of a white circle and surrounded by a red circle, resembling a target’s bullseye. When deciding on a name for the store, the founders considered hundreds of names, but ultimately decided on Target because the word represents hitting a bullseye. The idea was that the store would offer the best shopping experience and value, hitting a "bullseye" in terms of customer service. Target’s mascot, named Bullseye, is a bull terrier first introduced in 1999. The dog became famous through its appearance in television commercials. Unveiled in 1994, the company’s slogan is "Expect More. Pay Less." This is meant to highlight Target’s dedication to high quality and low prices.

Although a very successful company, Target has faced some setbacks. The two most significant were a failure to build a successful business in Canada and a data breach that led to hackers gaining access to seventy million customers’ credit card and personal information. It has also faced challenges in the twenty-first century due to a broader decline in the retail sector amid rising competition from e-commerce.

History

Although the business that became today’s Target Corporation commenced operations in 1962, the company had a long history before then. George D. Dayton founded the Dayton Dry Goods Company in 1902. Over the years, Dayton’s company expanded into a chain of department stores that sold a wide variety of general merchandise. Dayton’s grandsons took over leadership, and the company opened the first shopping mall in the United States in 1956 to help capture the suburban market. In 1961, the company decided to start a chain of discount stores called Target. The first Target store was opened in Roseville, Minnesota, in 1962, and more stores soon followed in the same area. Its first store outside of Minnesota was in Denver, Colorado, and opened in 1966.

In 1969, Dayton and the Hudson Company of Detroit, Michigan, merged to become the Dayton-Hudson Corporation, the largest retailer of non-food items in the nation. Just six years later, Target became the largest producer of revenue for the company. Following the change of its name to Target Corporation in 2000, the company sold its Marshall Field’s and Mervyn’s department store chains in 2004 to focus exclusively on the Target stores.

In 1988, Target started using UPC scanning in stores. It was one of the first mass merchandisers to do so. UPC scanning technology improves stores’ ability to track inventory and enhances efficiency in the checkout line at the store.

Beyond its traditional model, Target has started several other types of stores. In 1990, it opened a Target Greatland in Apple Valley, Minnesota. A Target Greatland was one and a half times larger than a regular Target and has more services (such as a bigger packaged food section and the addition of photo and pharmacy services) and wider aisles. Another example of an alternative type of Target store is the SuperTarget, which has fresh groceries in addition to general merchandise. The first one opened in Omaha, Nebraska, in 1995. Almost two decades later, in 2012, Target recognized the untapped urban market and opened the first CityTargets in Los Angeles, California; Chicago, Illinois; and Seattle, Washington. CityTargets are smaller than regular Targets and package items in smaller quantities to fit the needs of urban shoppers. In 2015, the company decided to rename each of its CityTarget and TargetExpress stores as simply Target. By 2017, it was reported that Target was focusing its expansion more heavily on these small-format stores, as they were proving more profitable.

In 2011, Target entered the Canadian market, purchasing the leases on 189 stores from Zellers, a struggling Canadian discount chain. Target converted 124 of these stores to Target stores, starting in 2013, and eventually increased the number to 133 stores. However, the attempt to succeed in the Canadian market failed, and the company decided in early 2015 to close all of its Canadian stores. The failure was attributed trying to start too many stores at once, having problems keeping items in stock, and arriving too late after competitors such as Walmart had already established themselves in Canada.

Target suffered a data breach in late 2013, during the lead-up to the holiday season. Hackers stole seventy million customers’ credit and debit card and personal information. As a result, Target experienced a significant decline in sales. It redoubled its efforts to make its customers’ information secure and win back trust. In part because of the scandal, CEO Gregg Steinhafel resigned in 2014 and was replaced by Brian Cornell, who was the first CEO to be recruited from outside Target.

In June 2015, CVS Health announced that it was going to buy the pharmacies and clinics in over 1,600 Target stores for $1.9 billion and operate them under the CVS name. Target’s CEO Cornell stated that this transaction would reduce the company’s costs in the healthcare business, enabling it to devote more attention to its food business.

For the remainder of the 2010s and into the 2020s, Target continued to grow despite various challenges; the company's revenue grew every year between 2018 and 2021, including a significant jump between 2020 and 2021, while the number of stores increased only slightly. The early 2020s saw the company contend with the COVID-19 pandemic, which in addition to leading to widespread lockdowns and other public health measures in the US, also created supply chain issues.

In 2022, amid rising inflation, the company decided to lower prices, cancel certain orders, and clear out inventory in response to changing consumer habits. Still, Target ranked 32 on the Fortune 500 list for 2022, citing increases in profits from the previous year. The company remained fairly profitable throughout 2023 despite a decline in sales during the second quarter of that year; meanwhile, it continued to offset declines in consumer spending on electronics and other non-essential items by expanding its offerings of groceries and other essential items. Target ranked thirty-seventh on the Fortune 500 in 2024.

Impact

Target places a large emphasis on fashion relative to competitors such as Walmart. Seventy-five different designers have created lines of items exclusively for Target. Although Target is a discount store, its first president, Douglas J. Dayton, focused on creating a bright, attractive customer experience. For example, he ensured that stores had wide aisles, displays that were easy to understand, and adequate parking. Because Target has made a greater effort than other discount stores to appeal to customers, shoppers over the years have referred to the store with a French accent; that is, "Tar-zhay." This represents customers’ acknowledgment of Target’s efforts to replicate the feel of a higher-end store.

The company has made an ongoing effort to have a positive impact on the communities in which it operates. An example: in 1996, the company donated $1 million to renovate the Washington Monument, even recruiting architect Michael Graves to assist in its design. In 2008, Target teamed up with the Heart of America Foundation to start the Target School Library Makeover Program. This program remodeled libraries, donated books, and sent volunteers to school libraries. Furthermore, in August 2014, Target publicly announced its support of marriage equality. It offers benefits to LGBTQ employees and their families. In 2016, in a further effort to promote a culture of inclusivity, the company announced that it promotes a policy in which transgender guests and employees are free to use the store restroom that corresponds with the gender with which they identify. While many supported this move, some groups expressed criticism and concern, with some calling for a boycott of Target stores. In response to conservative and religious backlash, the company installed single-occupancy bathrooms in every store.

In May 2023, the company faced renewed backlash from some conservative customers over its release of its Pride Collection, which included clothing, decorations and other items; citing an increased number of confrontations and incidents between employees and customers, Target later pulled some of these items from store shelves.

Bibliography

Delkic, Marina, and Jason Karaian. "Target Will Take a Profit Hit to Clear Out Inventory That Shoppers Don’t Want." The New York Times, 7 June 2022, www.nytimes.com/2022/06/07/business/target-profit-inflation.html. Accessed 13 July. 2022.

Gilbert, Sara. Built for Success: The Story of Target. Creative, 2015.

Isidore, Chris. "Target's $20 Million Answer to Transgender Bathroom Boycott." CNN Money, 17 Aug. 2016, money.cnn.com/2016/08/17/news/companies/target-bathroom-transgender/index.html. Accessed 25 Apr. 2018.

"List of 'Fortune 500' Companies." 50 Pros, 18 Sept. 2024, www.50pros.com/fortune500. Accessed 1 Oct. 2024.

"Our Locations." Target, 2024, corporate.target.com/about/locations. Accessed 1 Oct. 2024.

Rajesh, Ananya Mariam. "Target Sees Profit Boost on Fewer Discounts, Pride Backlash Hurts Sales." Reuters, 16 Aug. 2023, www.reuters.com/business/retail-consumer/target-cuts-annual-forecasts-americans-hold-back-non-essential-spending-2023-08-16. Accessed 10 Oct. 2023.

Rowley, Laura. On Target: How the World’s Hottest Retailer Hit a Bulls-Eye. Wiley, 2003.

Sorensen, Chris. "Off-Target: How a U.S. Retail Giant Misread the Canadian Market." Maclean’s, 21 Jan. 2015. www.macleans.ca/economy/economicanalysis/off-target-how-a-u-s-retail-giant-misread-the-canadian-market/. Accessed 15 June 2015.

"Target." United States Securities and Exchange Commission, 2023, www.sec.gov/ix?doc=/Archives/edgar/data/27419/000002741923000015/tgt-20230128.htm. Accessed 3 May 2023.

"Target: Number of Stores in the U.S. 2006–2023." Statista, 25 Sept. 2024, www.statista.com/statistics/255965/total-number-of-target-stores-in-north-america/. Accessed 1 Oct. 2024.

"Target Through the Years." A Bullseye View, Target Brands, 2014, corporate.target.com/about/history/Target-through-the-years. Accessed 21 June 2015.

“Target - 2024 Fortune 500.” Fortune, 2024, fortune.com/company/target/fortune500. Accessed 1 Oct. 2024.

Thau, Barbara. "Target's Small-Format New York City Store Marks Urban Push, Digital Battle with Amazon." Forbes, 19 Oct. 2017, www.forbes.com/sites/barbarathau/2017/10/19/targets-small-format-new-york-city-store-marks-urban-push-digital-battle-with-amazon/#6a8aa7c012ac. Accessed 25 Apr. 2018.

Thomas, Katie, et al. "CVS to Buy 1,600 Drugstores from Target for $1.9 Billion." The New York Times, 15 June 2015, www.nytimes.com/2015/06/16/business/dealbook/cvs-agrees-to-buy-targets-pharmacy-business-for-1-9-billion.html. Accessed 20 June 2015.

"Top 100 Retailers 2024 List." National Retail Federation, 1997–2024, nrf.com/research-insights/top-retailers/top-100-retailers/top-100-retailers-2024-list. Accessed 1 Oct. 2024.

Ziobro, Paul. "Target and Wal-Mart’s Problem: Shoppers." The Wall Street Journal, 16 May 2015, www.wsj.com/articles/target-wal-mart-to-show-if-turnaround-efforts-are-working-1431770403. Accessed 16 June 2015.

Zmuda, Natalie. "Walmart, Target, Kmart, Kohl’s: Leading 50 Years of Retail Revolution." AdAge, 19 March 2012, adage.com/article/news/walmart-target-kmart-kohl-s-lead-retail-revolution/233379/. Accessed 16 June 2015.