Earlier this week, we shared the news that Target plans to make some changes to its food offerings to appeal to a different group of consumers, especially millennials. Changes at Target will go beyond the grocery department. The company announced a $2 billion cost-cutting effort over the next two years that will result in layoffs and a reorganization at the company’s headquarters in Minneapolis.
In a different part of their balance sheet, though, Target plans to invest more money in other parts of their business. CEO Brian Cornell announced yesterday that they plan more than $2 billion in capital expenditures, investing in stores and infrastructure. A big part of that infrastructure will be technology. More of that money will go toward technology than in past years, since Target hopes to increase online sales in the next year. That’s what their change to a $25 minimum for free shipping was about, of course.
While expanding store grocery sections in the last few years has been great for getting people into the store, those customers haven’t been buying more profitable non-food items.
Target to cut $2B in costs, including several thousand jobs [Associated Press]
by Laura Northrup via Consumerist
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