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Target wants to reclaim the “Tarzhay” magic – so much so that executives mentioned the term 18 times during the company’s March 4 earnings call.
The retailer is betting big on revamping its in-store experience and bolstering new offerings to recapture the charm that once made it a beloved shopping destination.
Richard H. Gomez, Target’s (TGT-0.79%) chief commercial officer, explained that “Tarzhay” is a term coined by consumers to define the retailer’s “unique spin on product and experience.” The term emerged years ago and encapsulated Target’s cult-like following, driven partly by its ability to offer everything from groceries and electronics to pet food and laundry detergent. However, the magic has waned over time as consumers increasingly opt for the convenience of online giants like Amazon and price competition from rivals like Walmart.
But Target is waving a nostalgia wand in the hopes of winning back customers. This year, the company plans to invest $4 billion to $5 billion to revamp its existing stores and open at least 20 new locations. It will also allocate funds to supply chain and technology improvements. Over the next 10 years, Target aims to add roughly 300 U.S. locations.
As part of its effort to recapture market share, Target is adding 600 new food and beverage items to its private-label food line, Good & Gather. The move comes at a crucial time as inflation-weary consumers focus more on grocery prices. Target’s Dealworthy line was private-label success in 2024.
Additionally, the retailer plans to add 2,000 new beauty products, refresh its pet supplies, expand brand partnerships with companies like Disney and Champion (HBI+1.87%). Notably, the launch of Taylor Swift’s “The Eras Tour Book” drove huge online demand, becoming the highest-selling music book of all time.
The renewed push comes amid weaker sales and declining foot traffic. Target issued a cautious outlook after reporting earnings, citing “ongoing consumer uncertainty” and mounting concerns over the impact of tariffs.
CEO Brian Cornell told CNBC (CMCSA+0.23%) that fresh produce imports from Mexico – a key supplier during the winter months – will be directly impacted by these policies. He added that consumers would likely see price increases on fruits and vegetables, particularly bananas, avocados, and strawberries.
Target is facing a 40-day boycott, largely because it scaled back its diversity, equity, and inclusion (DEI) initiatives in January. Other major companies, such as Walmart and McDonald’s, have taken a similar approach, while Costco has doubled down on its commitments.
The challenges don’t stop there. Target is also facing a lawsuit from shareholders who accuse the retailer of hiding the risks associated with its diversity initiatives. In February, the state of Florida filed a similar lawsuit, alleging that Target was obscuring the financial risks associated with its DEI efforts.