The Atlanta Journal-Constitution
New paid membership program part of Target’s plan to add sales
Company to refresh current stores, build 300-plus new ones.
NEW YORK — Target, looking for ways to add sales, is relaunching its Target Circle loyalty program, including a new paid membership with unlimited free sameday delivery in as little as an hour for orders over $35.
The loyalty program, called Target Circle 360, will launch with a special offer for new members for $49 per year from April 7 through May 18. The current Target Circle program has more than 100 million members. The relaunch comes as Target aims to copy the success of Amazon’s juggernaut Amazon Prime and follow Walmart’s membership program.
Target unveiled a series of steps at its annual investors’ meeting on Tuesday that aim to rejuvenate sales and traffic. Target will refresh its stores, and over the next decade the Minneapolis-based retailer will build more than 300 new stores.
Separately, the company reported a 58% increase in fourth-quarter profits and handily beat Wall Street expectations as it cut costs and maintained a lean inventory during the critical holiday season.
Revenue rose slightly from a year ago and also topped projections. Comparable sales — those from stores or digital channels operating at least 12 months — slipped 4.4%. But the declines slowed compared with the 4.9% drop in the third quarter and 5.4% drop in the second.
Target offered a cautious outlook on sales and profits. “This is a unique moment to clarify our road map for growth,” CEO Brian Cornell told investors.
The meeting comes as Target’s shoppers remain cautious about spending on discretionary items as they are squeezed by inflation and high borrowing and creditcard costs.
Target is more vulnerable than Walmart and other big box discounters. More than half of its annual sales come from discretionary items such as toys, clothes and electronic gadgets.
The company has been trying to strike the right balance between offering value while also infusing its stores with trendy goods. Last month, it launched a new collection called Dealworthy, which features nearly 400 everyday basics starting at less than $1, with most items under $10. They include clothing and accessories, home items and electronics.
At the same time, Target’s deal, struck last year, with designer Kendra Scott to offer exclusive collections of earrings, necklaces has resonated with shoppers. So has the new kitchenware brand under its own label Figmint.
Target has been laser-focused on inventory levels after being burdened with heavily stocked warehouses in the summer of 2022. The inventory glut forced it to discount heavily to clear out those goods.
As for its membership program, Target will continue offering its free-to-join membership with personalized deals, member-exclusive sales throughout the year and additional perks and savings. New for members: Deals will now be applied automatically at checkout so customers don’t have to search for or add individual offers. Target said members of the free Target Circle membership program already shop five times more and spend five times more than nonmembers.
Target Circle (formerly Target RedCard) credit card holders will be able to sign up for Target Circle 360 at $49 per year if they have their card saved to their Target profile, the company said. Customers without a Target Circle card will pay $99 per year.
By comparison, an Amazon Prime membership costs $15 a month or $139 annually and includes free streaming of its Amazon Video, among other perks. The Walmart Plus program for free shipping costs $12.95 per month or $98 annually.
Target reported net income of $1.38 billion, or $2.98 per share, for the three-month period ending Sunday. That compared with $876 million, or $1.89 per share, for the year-ago period. The bottom-line results for the latest quarter far surpassed estimates of $2.42 per share, according to FactSet.