Target Says it Won’t Follow Walmart and TJX in Wage Hikes
Target CEO Brian Cornell told investors during the fourth-quarter conference call yesterday that the retailer won’t be raising its minimum wage to $9 like its competitors, Walmart and TJX Companies.
“Our goal is to make sure we have the very best team in retail,” Cornell said. “And we’re going to continue to invest in their development and make sure from a marketplace standpoint we’re very competitive with the wages we provide.”
“We’re all the time assessing the marketplace to determine competitive wages and making adjustments and we feel very confident they we’ll be paying the teams appropriately,” added CFO John Mulligan.
The retailer, which operates about 1,790 stores, isn’t saying how much it pays employees, but insists the average is over the federal minimum wage of $7.25 an hour.
While the federal minimum wage has stayed stagnant at $7.25 for nearly ten years, some states have minimum wages at or above $9 an hour—California, Massachusetts and Rhode Island are $9, Connecticut and Vermont are at $9.15, Oregon is $9.25, Washington is $9.47 and Washington D.C. is $9.50.
Walmart announced last week that it would raise the wages of its lowest paid workers to $9 an hour in April and boost current employees to $10 an hour next year. TJX Companies, which operates T.J. Maxx, Marshalls, HomeGoods and Sierra Trading Post, said this week that it would do the same.
Many analysts suspect Target may feel pressured to join Walmart and TJX.
Dave Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas in the Twin Cities, the home of Target headquarters, told Minnesota Public Radio, “If you look at companies like Costco as an example — you look at Chipotle, you look at Starbucks, Whole Foods — they pay their people pretty well. And I think there is going to be an increasing pressure for retailers in particular to increase the minimum wage.”
Target reported Q4 sales up 4.1% to $21.8 billion, but swung to a loss of $2.6 billion on the Canada debacle.
