Target was once the gold standard of big-box retail — bright, organized, and reliable. Shoppers viewed its stores as cleaner and more stylish than Walmart or Costco. But that reputation has started to fade.
In recent years, customers have complained about disorganized aisles, longer checkout lines, and empty shelves. These operational headaches are taking a toll. Target’s sales have stagnated, and its once-loyal shoppers are heading elsewhere.
The company’s leadership knows it has a problem. Its new CEO, Michael Fiddelke, who takes over in February, has made one thing clear: if Target wants to win back customers, it must start by fixing what people see when they walk in the door.
A Shift in Strategy
To address declining store quality, Target is changing how it fulfills online orders. The company had long prided itself on using stores as mini-fulfillment centers. Nearly every Target location picked and packed products for online orders — about 98 percent of digital sales in the last quarter were handled this way.
That approach helped the company avoid massive warehouses like Amazon’s. But it also stretched employees thin, taking focus away from in-store shoppers. Fiddelke admitted that Target’s “stores as hubs” model has become too complex. “If you’re a store manager now, yes, you’re supporting your in-store guest and you’re also running a fulfillment business that’s gotten pretty big,” he said.
Target is now testing a new model. Instead of every store shipping orders, only select stores will handle online fulfillment, while others will focus entirely on in-person sales. After a successful pilot in Chicago, the program has expanded to 36 markets, with more planned for 2026.
Early Signs of Improvement
According to Gretchen McCarthy, Target’s Chief Supply Chain and Logistics Officer, the shift has already made a difference. In Chicago, 18 stores stopped fulfilling online orders while six ramped up shipping. Just five stores now handle about 30 percent of the area’s ship-to-home volume.
The results have been encouraging. McCarthy said stores that dropped online fulfillment duties saw better in-stock levels, cleaner aisles, and stronger sales. Customer surveys in those locations showed a 10 percent increase in satisfaction with store cleanliness and employee interaction.
“The store is still very much the hub of everything that we do,” McCarthy said. “We’re just getting more precise and maybe a little bit more refined in how we’re using all of those stores and our supply chain network.”
Even the online experience improved. Target customers rated curbside and in-store pickup higher in those test markets.
The Challenge That Remains
Still, Target’s problems go deeper than messy aisles. Foot traffic has dropped nearly every week since February, according to analytics firm Placer.ai. Part of that decline reflects the broader economy — higher grocery prices have squeezed household budgets — but it also reflects brand-specific problems.
Some shoppers say stores feel less pleasant to visit. Common complaints include locked-up items to prevent theft and long lines at checkout. Target says most stores only lock up high-value products like electronics, but customers report seeing everyday items such as deodorant behind glass.
Target has also struggled to balance staffing between traditional and self-checkout lanes. In March 2024, the company limited most self-checkout lanes to 10 items or fewer, hoping to speed up the process. The change led to slightly better experiences, but it also underscored how far the company had fallen from its once-effortless reputation.
Losing the Edge Over Rivals
Target’s in-store experience still ranks above competitors like Walmart and Sam’s Club, but the gap is closing fast. In October 2021, Target outscored its rivals by 35 points on atmosphere and cleanliness, according to data firm HundredX. By October 2025, that lead had shrunk to just 20 points.
In the same study, Target underperformed peers on item availability. Only 43 percent of customers gave positive ratings for in-stock levels, compared with 47 percent for competitors.
That’s not a small issue. For retailers, stockouts drive shoppers online or to competitors. One customer, Utah mother of three Emily Haleck, told CNBC that she used to visit Target weekly. “It used to feel clean and organized,” she said. “Now, the clothing section is chaotic.” She says she now shops at Walmart weekly instead.
The Cost of Cutting Too Deep
Target has reduced corporate headcount by roughly 8 percent, part of an effort to streamline operations. But some analysts say the company risks cutting too much.
“You can’t keep cutting costs,” said Scot Ciccarelli, a retail analyst at Truist Securities. “You can’t cut your way to prosperity.” He believes Target needs to invest more in staffing, store improvements, and technology to regain its competitive edge.
Fiddelke insists that the company is “always looking at what’s the right level of staffing,” but says the goal is to make work simpler, not necessarily to add more people. He noted that Target’s internal data shows in-stock levels have improved for three consecutive quarters.
During the upcoming holiday season, Target expects shelves to be fuller and operations smoother than last year. But Fiddelke admitted that “there’s more work to do on the other side of the holidays.”
Why It Matters for Investors
For investors, Target’s situation highlights the challenge of balancing digital growth with in-store execution. The company’s digital sales have tripled since 2020, from $6.6 billion to nearly $21 billion. But that success has come at the expense of the brand’s core strength — the in-store experience that built customer loyalty in the first place.
A cleaner, better-managed Target could translate into higher foot traffic, improved margins, and renewed market confidence. But if leadership fails to fix the fundamentals, competitors like Walmart and Costco will continue to chip away at its share of the middle-class retail market.
The next few quarters will tell whether Fiddelke’s plan works or if Target remains stuck in neutral. Either way, the retailer’s turnaround depends on something simple: clean stores, full shelves, and happy shoppers.
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