Can Retail Be Great Again?

Target has had a few good months — its shares are up 32% since August. So, Tuesday morning the company took something of a victory lap, as it announced fourth-quarter results. CEO Brian Cornell was exuberant in describing Target’s recent progress. “What a difference a year makes…The investments we’re making are taking root and they’re driving results.” Target is increasing its minimum wage to $12 an hour. The company is accelerating store remodels (325 this year alone) and opening more small-format stores. The remodels are driving an average sales lift of 2% to 4% per store, Target said. Also, the company announced free two-day shipping for “hundreds of thousands of items” with no membership required. Target says it’s cutting nearly two days off shipping times, by using its existing stores to fill orders, versus regional fulfillment centers. It’s clear Target’s management team has spent the last year thinking carefully about the threat from Amazon.com. Read more at Barron’s.