If you tuned in on Tuesday to Target’s investor day, during which the retailer’s new CEO Michael Fiddelke and his top lieutenants laid out their plan to return the big box retailer to growth, you likely picked up on a recurring theme: Target’s avoidance of straight talk within its management ranks in recent years had let problems fester, causing it to lose ground against other retailers, and that had to end.
“We used to be strong and a pacesetter,” Fiddelke, who took over as CEO Feb. 1, told investors at Target’s headquarters in downtown Minneapolis. “We haven’t been for the last few years.”
His assessment was clear: Target has lost its way and, to some extent, its identity. The retailer affectionately nicknamed “Tarzhay” for its cheap-chic merchandise had earlier on Tuesday reported a fourth quarter in a row of declining comparable sales, though it forecast net sales growth of 2% for 2026.
However modest, growth would provide much-needed relief for Target, which struggled in the last three years to lift sales as shoppers balked at what they saw as high prices. Customers have also been unhappy with messy, understaffed stores, uneven service, and poorly stocked shelves. Perhaps most worryingly, Target’s fun, nice-to-have but not essential merchandise that had earned it legions of devotees just wasn’t landing consistently like it used to.
Fiddelke, a 23-year company lifer who has been Target’s operations chief and finance chief, told Fortune in an interview that the key to getting Target out of its rut is a culture and communication shift.
“We just need to be crystal clear on who we are,” he said. “We haven’t, over the last few years, always done the best job.”
Fiddelke told investors that Target’s $6 billion plan to rejuvenate the business in 2026 would bring the most change the company has seen in a decade.
Executives walked analysts and journalists through mock-ups of the improvements in the works: Target will expand its food area and its Good & Gather food brand, now a $4 billion store label. It will start selling fresh flowers. On the apparel side, Target plans to take a page from fast-fashion retailers’ books and use technology to monitor social media chatter and jump on trends more quickly. It will remodel its home goods section and add merchandise in trendy areas, while paring down selections to be more focused. And Target will ramp up staffing at stores to ensure better customer service.
About 10 years ago, Target was dealing with similar problems: too many empty shelves because of supply chain problems, merchandise that wasn’t catching on, and a siloed culture in which executives weren’t candid about problems, causing them to fester.
Target’s former CEO and current executive chairman Brian Cornell got the company out of that slump with big moves such as closing its flailing Canadian division, overhauling Target’s store brands, and pumping billions into stores to modernize them, among other efforts.
Then the pandemic brought new problems, even though at first it brought enormous growth—revenue rose nearly 20% in 2020. But keeping up with that demand overwhelmed the company. Target lost sight of what set it apart from the likes of Walmart, Ulta Beauty, and Amazon. It didn’t help that Target later backed away from years of pledged support for diversity and inclusion efforts that aimed for higher representation of minority groups in the company and among suppliers, and then clumsily flip-flopped on its showcasing of merchandise tied to events like LGBTQ Pride month under pressure from right-wing activists, angering consumers across the political spectrum.
Given Fiddelke’s leadership roles in the period leading up to and including Target’s current slump, one analyst asked why investors should be confident he can bring Target back to glory. Fiddelke touted his institutional knowledge and deep understanding of the brand and its operations. “Knowing who we are as a company is our real advantage,” he told the analyst. “Understanding how the levers of the business work and when Target’s at its best.”
He promised to improve communication and frankness: “I lead with a ton of candor,” he told Fortune. “I’m a big believer you can’t solve a problem that you’re not talking about, and I try to create a culture where that’s how we’re assessing the business as a team.
It’s already paying off, Fiddelke claimed “There’s a little bit of the swagger that we need to bring back. That won’t happen overnight, but I can see it showing up, and the team starting to lean into the changes.”
