"Target will direct about $5 billion toward new and remodeled stores, experience upgrades, and technology and digital fulfillment, with leadership emphasizing larger-format boxes that are outperforming initial plans and store-floor changes designed to accelerate "merchandising authority" and discovery. The push includes AI to speed product development and marketing, synthetic audiences to test campaigns, and a ChatGPT-powered beta to simplify multi-item purchases, part of a broader effort to reawaken the "Tarzhay" brand while tightening execution."
"The investment arrives amid sliding comps and traffic, with Q3 net sales down 1.5%, comps down 2.7%, and net earnings off 19.3%, capping a multiyear stretch of sluggish or negative comparable sales as value-focused consumers shift toward essentials and competitors gain share. Analysts cite macro pressures and category-mix challenges-apparel and home remain weak-though beauty, food and beverage, and hardlines show resilience, offering recovery lanes if in-store experience and assortment unlock discovery and value."
Target plans roughly $5 billion in capital spending next year, plus an additional $1 billion for 2026, focused on new and remodeled stores, experience upgrades, and technology and digital fulfillment. Leadership is prioritizing larger-format boxes and store-floor changes to boost merchandising authority and discovery, while leaning into resilient categories such as beauty, food and hardlines. The company will deploy AI for product development and marketing, use synthetic audiences for campaign testing, and trial a ChatGPT-powered tool to simplify multi-item purchases. The investments aim to reverse multi-year declines in comps, traffic, and earnings and recapture in-person shoppers, especially Gen Z.
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