Can Target Regain Its Mojo?

Shoppers walk to the Target store, Thursday, Aug. 14, 2025, in Bedford, N.H. (AP Photo/Charles Krupa)

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Target took the long overdue step of making a CEO change, announcing that current head honcho Brian Cornell will retire next February and chief operating officer Michael Fiddelke will replace him. They also helped me notch an early win for one of my 2025 predictions. But I digress.

In true Shania Twain fashion, Wall Street’s reaction to the news was “that don’t impress me much,” as disappointment over the company’s failure to name an outsider to the top spot sent shares down more than 6%. It also didn’t help that the company reported yet another weak quarter that confirmed it continues to lose relative market share.

Reversal Of Fortune

In late 2021, 8 years into his tenure as CEO, Cornell received the National Retail Federation’s “Visionary Award,” recognizing that Target’s results had been quite impressive. Revenues grew from roughly $60 billion to over $100 billion. Outsized growth was also coming from digital sales and private brands. Major investments were being made to leverage Target’s stores for local market fulfillment, something we were excited to showcase on the Remarkable Retail podcast.

Since then just about everything has taken a turn for the worse, with revenues going nowhere and profits declining. After peaking in July of 2021, Target’s stock is down more than 60% during a period when most of the competition racked up substantial gains.

Most notably, perhaps, is the dramatic differential in revenue growth rates compared to Walmart. During the past three years Target had flat to negative same-store sales while Walmart has averaged closer to 6% increases. Moreover, Walmart’s e-commerce sector has been on fire while Target’s growth typically falls short of industry averages. For example, in their just reported earnings, Walmart’s US stores were up 4.6% on a comparable basis, while Target’s declined by 1.9%. Walmart’s digital sales grew over 26% while Target’s were up just 4.3%.

Own Goals

To be sure, the macro-environment is not as favorable to Target as many others. It’s merchandise mix is more discretionary than essential. And during a time when consumers have become more “choice-ful” (as retailers like to say) its position as a trade-up from pure value players isn’t ideal.

But most of Target’s problems are self-inflicted. A focus on growing online fulfillment from stores took much needed resources away from both front of the house customer service and upgrading visual merchandising. Product out-of-stocks remain all too common occurrences. What once seemed like a promising, traffic driving, partnership with Ulta is now being dissolved.

Rather than leaning into its distinctiveness and “Tarzhay” positioning and cache, the company often drifts into a race to the bottom, trying to out-Walmart Walmart with price matching and new extreme value offerings. Gentle reminder from Seth Godin: “The problem with the race to the bottom is you might win. Or worse, finish second.”

What’s received the most attention as an “own goal” is the company’s diversity, equity, and inclusion related debacles. In 2023, Target angered (and prompted boycotting on the part of ) conservative activists and homophobes by showcasing “Pride” merchandise. Then, after a period of adopting a comparatively lower profile on social issues, the company got hit earlier this year with backlash and a boycott from the other end of the spectrum, as it significantly scaled back on its DEI strategy and initiatives.

It’s clearly wrong to blame Target’s recent woes primarily on their caving to activist pressures—and more generally failing to demonstrate courageous leadership—but traffic declines do appear to have accelerated since the boycotts began.

Meet The New Boss, Same As The Old Boss?

The elevation of Michael Fiddelke to the top job is generating lots of criticism—as is the Board’s decision to keep outgoing CEO Brian Cornell around as “executive chairman.” And for good reason.

Clearly, Fiddelke has the operating chops and is well steeped in the business and culture, having held a wide variety of key leadership roles since joining the company as an intern two decades ago. But it does seem more than a bit curious that they guy who was overseeing many of the areas where Target continues to experience executional snafus got promoted. Keeping Cornell around is also not a sign that disruptive change is on the way. But it is likely a sign of a board of directors that isn’t especially willing to really shake things up.

Aside from that, the history of putting financially oriented executives in charge of a turnaround that requires being more customer-centric and taking bolder strategic action isn’t exactly chock-a-block with success stories.

Aim Higher, Move Faster, Act More Boldly

What is clear is that Target has really lost its way, and is facing both well resourced competition with incredible momentum and an increasingly challenging economic environment.

In this situation, better execution and fixing the leaky bucket of customer defection is absolutely necessary, but far from sufficient. Target needs big change–a fairly radical rethink–not what I refer to in Leaders Leap as “infinite incrementalism.”

Both customers and investors need to expect much, much more from Target. Whether an insider can catalyze the bold action necessary to avoid the timid transformation trap that so many legacy retailers fall into obviously remains to be seen.

So far the three priorities Fiddelke has laid out — re-establish merchandising authority, elevate the customer experience, and use technology to improve speed and efficiency— re-establish are eminently sensible. But they also sound a lot like what other retailers have been saying for years.

They’re great rallying cries, but the devil will be in the details and whether they can go beyond mere table stakes to become powerful differentiators that will improve margins and win back customers who have migrated elsewhere is no small task.