What the Hell Is Wrong With Target?

Target store front
Target has a bullseye on itself, literally | Saul Loeb/AFP/Getty Images

There might not be a more aptly named company in America right now than Target. The big retail chain has had several setbacks lately, which, in some ways, amount to a figurative target painted on the company’s back.
It became clear Target was experiencing issues when it decided to close its stores in Canada — all 133 of them. It takes a lot to get a company to give up on an entire country — especially one that’s just a step away from Target’s Minnesota headquarters. Target’s presence in Canada lasted less than two years, and the closing of those 133 stores left more than 17,000 people without jobs.
But the company’s failure in Canada was only one of Target’s recent problems.
Target also took a proverbial chainsaw to its domestic workforce, laying off as many as 1,700 employees, including 200 managers. If that wasn’t enough, the HR personnel who facilitated those layoffs were shown the door themselves. And, don’t forget about that massive data breach that saw more than 40 million customer credit cards compromised, and lost personal information from more than 110 million people.
Between store closings, layoffs, and lawsuits, it’s clear Target has its hands full. But the simple question remains: What the hell is the company’s problem? Let’s take a look at 10 things contributing to Target’s downfall.

1. Target has a history of alleged discrimination

shopping in a big-box store
Target has settled major discrimination charges. | Kenzo Tribouillard/AFP/Getty Images

Target was accused of using hiring tests that were considered discriminatory based on race and gender. Consequently, in 2015, the retailer agreed to a $2.8 million settlement with the Equal Employment Opportunity Commission. A few years prior, Target was hit with a class-action lawsuit that alleged age discrimination. Some workers accused Target of forcing out older workers.

2. Employees are unhappy

unhappy worker
Some Target employees aren’t very happy. | iStock.com

Those who work in Target’s retail stores don’t seem too happy. And as you probably already know, happy employees make a happy company. All it takes are a few disgruntled workers to make your job a pretty miserable place to work. A title for one Glassdoor review written by an employee was “slave labor.” And yet another anonymous employee simply wrote “Target sucks.” That pretty much says it all, if you ask us.

3. Customers aren’t satisfied

woman holding shopping bags
Target’s foot traffic has declined. | iStock.com/GeorgeRudy

You can’t find everything you want or need at Target. This is especially true when it comes to the grocery section. Even Target’s chief operating officer said the grocery selection was lacking, Money magazine reported. Most store representatives are paid to say good things about a company, so this is very telling. Many customers aren’t fully satisfied with Target’s offerings, as can be seen by the 2.2% dip in the store’s foot traffic. (Similar stores only had a 1.1% dip.)

 4. 2017’s outlook is poor

Businessman presenting financial analysis with charts
The retailer missed analysts’ projections. | iStock.com/NicoElNino

Adding insult to injury, Target’s stock has been limping along. The retailer’s shares took a significant dip following an earnings shortfall in late 2016. Following an anemic holiday 2016 quarter, things started to go downhill. Because sales and earnings did not meet Wall Street’s expectations, it’s been bad news for the big-box store. “Target’s stock price sank more than 13% in early trading, putting it on pace for its worst day since Aug. 31, 1998, when the company shed more than 16 percent,” CNBC reported.

5. Amazon is leaving big-box stores in the dust

Amazon boxes
Amazon is blowing the competition out of the water. | Tommaso Boddi/Getty Images

You can get pretty much anything on Amazon, so this makes for stiff competition. If Target’s grocery selection doesn’t do it for you, Amazon has a better alternative through its AmazonFresh division. And the best part is you don’t even have to leave the comfort of your home to make a purchase. With the click of your mouse you can have fresh food delivered to your doorstep. How’s that for service?

6. People love Costco

Costco exterior
Costco is America’s favorite retailer. | Justin Sullivan/Getty Images

Target might have a few fans left, but it’s not America’s favorite retailer. Another big-boxer has taken that spot: Costco. People just can’t seem to get enough of buying in bulk. It’s one of the best places to go if you like to buy enough toilet paper to last you until the end of next year. Shoppers seem to agree. Costco, along with Dillard’s, scored an 83 out of 100 on a 2016 American Customer Satisfaction Index.

7. Warren Buffet has sounded the alarm

Warren Buffett
Warren Buffett said online retailers are gaining on the big-box stores. | Bill Pugliano/Getty Images

In an interview with CNBC, Berkshire Hathaway CEO Warren Buffett said things are getting a bit dicey for big-box stores. Back in the day, big department stores were king. However, with so many online retailers, it has become a fight to the death. When customers can choose from a wider selection of goods online and then have them delivered to their homes (sometimes even on the same day), that often beats the need to physically visit a retail store.
“And now comes the internet, and that’s the ultimate variety of things that you can get to very easily,” Buffett told CNBC. “So people love variety. They love low prices and a whole bunch of things. So, it’s — it just keeps evolving. And the great department stores, many of them have disappeared, and the rest are under pressure.”

8. Wal-Mart is putting up a fight

Wal-Mart storefront
Competitor Wal-Mart is catching up. | Joe Raedle/Getty Images

Wal-Mart has decided it’s not going to take this retail fight sitting down. Instead, it decided to strike back by investing in some of the latest technology. The store is working on introducing two new features to its mobile app. This is a direct hit at large retailers, including Target and Amazon, CNBC reported.
The first app feature will give customers the ability to refill and manage prescriptions from their phones. The second feature will allow customers to scan items from their phones and then add them to their shopping carts.

9. Target can be hard to find

Target store sign
More Target stores are closing down each year. | Scott Olson/Getty Images

Another thing that’s wrong with Target is the increasing amount of store closings. Target stores are already not that easy to find in some neighborhoods. And now that’s becoming even more difficult. Target closed 11 stores in 2015 and 13 stores in 2016.

10. Not everyone wants one in their backyard

Target checkout line
Small towns aren’t very welcoming of big-box stores. | Scott Olson/Getty Images

Some people get pretty angry when they hear a big retailer will be moving in. Residents worry about the noise level and increase in traffic that a popular store will bring. Small-business owners face a potential loss of customers and rising rents as a result of big retailers moving in.
This concern sometimes gives way to a community protest. One example was back in 2011 when residents of Saranac Lake, New York, decided to fight against having a Super Wal-Mart. Instead, the residents pulled together and opened their own department store.