Skip to main content

After Amazon, Target may now be the biggest threat to struggling retailers

The Minneapolis retailer goes from strength-to-strength while others stagnate.

The successes enjoyed by Target in recent years may well be at the expense of its fellow big box retailers.

While much of the focus on the decline in bricks-and-mortar retail has been on the impact from online shopping, in particular Amazon, there are signs now that Target is proving a similar threat to other businesses.

The Minneapolis retailer's most recent third quarter results revealed a 5 percent growth in sales, generating revenue of $18.7 billion, and comparable sales growth of 4.5 percent.

Target also upgraded its guidance for the crucial holiday season, seeing its share price skyrocket by $16 as a result, and is now trading at the highest level in its history.

Its success flies in the face of the prevailing situation among some of its fellow big box retailers.

This month also saw Macy's post its Q3 results, which saw a 4.3 percent drop in sales while profits plummeted from $62 million last year to just $2 million this year.

J.C. Penney and Kohl's posted similarly stagnant results, although Target's major rival Walmart managed to post same store sales growth of 3.2 percent, which was more than expected albeit less than Target's.

Per HFN Digital, Macy's said that the late arrival of cold weather, a drop in intentional tourism and lower-than-expected performance in "lower tier" malls were behind its downturn, but those same factors don't appear to have affected Target, which in recent has invested heavily in revamping its stores, upgrading its loyalty programs and boosting its customer pickup services to get more people through its doors.

Sign up: Follow Bring Me The News on LinkedIn

Seeking Alpha in turn has suggested that Target is now poaching shoppers from other big-box retailers, much like Amazon has done before, all the while not going down the route of aggressive price cutting adopted by its competition.

"If Target's revenue is growing then it is likely coming at the expense of other retailers. Traditional retailers have tried to beat back the Amazon threat for the year," the website noted. "The 'Target Threat' could now become the next narrative."

It adds: 

"Rising store traffic may have been the biggest differentiating factor between Target and other retailers. The company has always offered quality products at discount prices. Now, it has a respectable digital channel and same-day fulfillment options customers have come to demand. Several retailers have struggled to drive traffic to stores. They have had to rely on aggressive promotions to attract customers. This has crimped margins and in some instances, sapped liquidity. The more Target grows, the worse it could get for the competition."

Target heads into the Christmas period knowing it's now one of the country's premier toy retailers, having leapt at the chance of filling the vacuum created by the demise of Toys "R" Us by pumping huge sums into expanding and revamping its toy departments.

While it's not good news for other retailers, it's positive for Minnesota, not least because the other major state-based retailer, Best Buy, is another of those companies bucking the trend.

The Star Tribune reported last week that both companies are heading into the holiday season in a strong position, with Best Buy having undergone a successful turnaround in the past five years that has seen it survive as one of the few remaining electronics-only retailers.

The newspaper notes that the two retailers rely on differentiators to stand out from the crowd, with Target benefiting from its huge array of exclusive brands, and Best Buy its team of electronics experts in the form of the Geek Squad.

Next Up


Charges: Driver had been drinking at party before striking teens, killing one

The victims were walking home from Walmart at the time of the crash, according to court documents.

Screen Shot 2023-01-30 at 4.32.08 PM

State: Beltrami County Jail conditions present imminent risk of 'life-threatening harm'

The state is taking action to force changes at the Beltrami County Jail.


Tributes to 15-year-old girl killed in Burnsville crash

The teenager was a student at Burnsville High School.

police lights

Charges: New Ulm couple abused young children with cruel punishments

Warning: The following contains upsetting details about child abuse.

Screen Shot 2023-01-30 at 1.18.29 PM

Boy reels in 9.5lb walleye, wins pickup truck at Brainerd ice fishing tourney

Contestants come from all over the country compete in the annual event held in Brainerd.


Arrowhead 135 ultramarathon in northern MN kicks off in -25F temperatures

The race is considered one of the 50 most challenging races in the world.


Members of Target's new loyalty program shop more often, spend more

Target is reaping the benefits since launching Target Circle.

Holiday season a winner for Target, persuading more shoppers through its doors

The Minneapolis retail saw comparable sales grow 5.7 percent over the festive period.


Target sales grew by $15B in 2020, more than past 11 years combined

The pandemic led to a historic year for the Minneapolis retailer.

target store

Target announces blowout 3rd quarter results

The retailer has seen business surge during the pandemic.

Target store

After bumper earnings, Target will accelerate new store openings

The retailer has revealed its plans for the next few years, which includes an investment in Minneapolis.

Target announces 6 store closures, including Brooklyn Center

The Bullseye is shutting down underperforming stores.


Target quarterly sales rise again after historic year of COVID sales

Target's profits rose from $284 million in Q1 last year to $2.1 billion this year.

Screen Shot 2020-10-29 at 6.52.02 AM

Target reveals its first Black Friday deals; month-long discounts planned

The retailer is staggering its sales to make it easier to shoppers to plan amid COVID-19.