Another CEO steps down at Target. Another promise of reinvention. But retail doesn’t hand out mercy. You either adapt or you end up next to Toys “R” Us, Circuit City, and Kmart in the business graveyard. Target isn’t gone yet, but the warning signs are clear.
What Went Wrong at Target
Target’s problem isn’t complicated. It’s identity.
Walmart owns price. Costco owns bulk. Dollar stores own quick and cheap. Target sits in the mushy middle. It has tried to be Walmart with its grocery aisles, a fashion brand with its clothing, and a home store with its décor. In the end, it isn’t the best at any of them.
The data backs it up. According to Placer.ai, Dollar General, Dollar Tree, and Costco have grown store visits by 36.6% to 45.9% since 2019, while Target’s visits stayed flat. Even worse, Dollar General now receives more visits than Target. That’s a staggering shift. In 2019, Target held the second-highest share of visits among these retailers. Six years later, it’s behind a chain once dismissed as “rural convenience”.
Target’s discretionary-heavy mix only adds to the pain. Home décor, fashion, and seasonal goods may look great on Instagram, but in an inflationary economy, they’re luxuries. Shoppers aren’t filling carts with throw pillows. They’re filling carts with canned soup and laundry detergent.
Even the bright spots have shadows. Drive Up service and same-day delivery gave Target a tech-friendly image, and loyalty among frequent shoppers ticked up from 20.1% to 23.6%. But a small loyalty bump isn’t enough if overall traffic is stagnant. That’s like bragging about a bigger regular crowd at your bar while half the stools sit empty.
The New Retail Reality
Target’s challenges aren’t just internal. The competitive map has been redrawn.
Dollar General has redefined itself by adding groceries and fresh produce, transforming into a genuine daily stop for households that used to split time between Walmart and Target. Costco has lured higher-income families with bulk savings, stealing exactly the demographic Target once called its sweet spot. Dollar Tree keeps shoppers coming back with the simplest pitch in retail: predictable pricing and fast in-and-out trips.
Placer.ai’s report points to another problem. Cross-shopping has exploded. People aren’t loyal to one chain. They spread their spending across multiple stores. Walmart and Target still show up as popular secondary stops, but being the “second stop” isn’t a strategy. It means the bulk of the budget is spent somewhere else before you even get a chance.
That’s not dominance. That’s survival.
What Target Could Do
The bullseye isn’t gone, but it needs a new aim.
- Pick a Lane
Target can’t keep drifting. Either be the stylish “cheap chic” option or lean into being a true one-stop suburban hub. Right now it’s straddling both and convincing no one.
- Shrink to Win
Dollar General and Dollar Tree proved small formats thrive. Target should stop assuming bigger is better and experiment with compact stores that fit urban and semi-rural gaps.
- Fix Pricing
Walmart hammers “everyday low prices.” Dollar Tree built its identity on fixed prices. Target’s pricing feels inconsistent, sometimes inflated. It needs to simplify, clarify, and win back trust at the register.
- Double Down on Exclusivity
Target’s designer collaborations and private-label home lines once made it stand out. That edge has dulled. Bring back limited runs, designer tie-ins, and storytelling that makes shopping feel like discovery.
- Get Serious About Groceries
Grocery traffic is the backbone of Walmart’s empire and Dollar General’s surge. Target’s grocery aisles still feel like an afterthought. If groceries don’t pull shoppers in weekly, the rest of the store never gets a chance.
- Stop Mistaking Loyalty for Growth
A small bump in repeat visitors doesn’t save the business if total traffic is flat. Target must create new reasons to visit, not just rely on convenience apps to hold onto existing customers.
The Warning
Placer.ai summed it up: “The hypergrowth of Costco, Dollar Tree, and Dollar General between 2019 and 2025 has fundamentally changed the brick-and-mortar retail landscape”.
That leaves Target with a choice. Redefine itself for today’s fragmented, value-driven marketplace, or slide toward the fate of Sears and Kmart.
The bullseye is still on the wall. The only question is whether Target has the discipline to aim again.
The right strategy isn’t a luxury, it’s survival. If you want to explore what that looks like for your business, let’s talk strategy? I’d be happy to connect.. Contact Paul
