Target is set to double its bonuses for salaried staff this year, demonstrating strong financial performance despite experiencing its first decline in in-store traffic and sales since pre-pandemic times.
Target’s 100% Bonus Promise
According to sources who wished to remain anonymous, Target is gearing up to pay out 100% of the eligible 2023 bonuses for its employees, a significant increase of 50% from the previous year.
Who Benefits at Target?
The retail giant, which boasts a workforce of more than 415,000, mostly comprised of hourly and distribution-center staff, has not disclosed how many will receive the bonus boost.
Exclusions and Arrangements
According to some insiders speaking to Bloomberg, the bonus increase does not cover hourly staff, and there’s a distinct bonus arrangement for high-level executives.
The cash bonuses are scheduled for distribution at the end of March.
Bonus Framework and Distribution
A Target spokesperson explained that the bonus framework is based on objectives established at the fiscal year’s start, focusing on sales and profit results.
Performance and Profit Growth
Given Target’s impressive performance in 2023, including a $2 billion surge in profit growth surpassing the year’s initial goals, the company is set to reward its team accordingly.
Rebounding from Declining Sales
Target’s decision to increase bonuses comes as the company aims to rebound from three straight quarters of declining sales. Yet, it reported a profit boost in the fourth quarter of 2023 compared to the same period the previous year, attributed to larger inventories of discounted stock.
Holiday Earnings and Sales Forecast
Earlier this month, Target Corporation announced an increase in its holiday-quarter earnings, surpassing expectations with a minor sales drop.
Target’s 12% Rise
The company forecasted that its yearly comparable sales would significantly exceed Wall Street predictions, resulting in a 12% rise in its stock value.
Encouraging In-store Spending
To encourage more in-store spending, Target is focusing on same-day service offerings, introducing new products, and launching a new membership program.
Black Friday and Cyber Monday Impact
Target reported that strong sales during Black Friday and Cyber Monday significantly contributed to its holiday-quarter revenue. The company noted an increase in customer interest in new collections like Kendra Scott jewelry and its own Figmint brand of kitchenware.
Popular Services
Target also highlighted the popularity of its same-day pickup services, such as Drive-up, which accounted for over 10% of the quarter’s total sales.
300 New Stores
Looking ahead, the CEO announced plans to expand Target’s presence by opening more than 300 new stores across the U.S. and remodeling the majority of its existing 2,000 stores over the next ten years.
Target’s Affordable Brand
To cater to customers feeling the pinch of inflation, Target has unveiled its most affordable brand to date, named “Dealworthy.” This new in-house brand features a vast array of products predominantly priced below $10, making it 50% cheaper than any other brand available at Target’s nearly 1,900 stores nationwide.
The brand will launch progressively throughout 2024 and includes over 400 items, with a considerable number also available for less than $1.
Competing with Paid Memberships
For those with a bit more to spend, Target has introduced a paid membership program designed to compete with Walmart’s Plus subscription and Amazon Prime.
Target’s Circle 360
Starting April 7, for a limited five-week period, Target is introducing its Target Circle 360 program at a special annual membership rate of $49, as announced in its recent earnings report.
This offer enables members to enjoy same-day delivery for orders exceeding $35.
Promotional Period for Target Circle
After this promotional period, the membership fee for Target Circle 360 will increase to $99 per year, providing subscribers with benefits including annual birthday gifts, complimentary shipping, and an extra 30 days for returns, in addition to the usual 90-day return policy.
