The Target store in Paramus, New Jersey, in a shopping center next to a waxing center and a Wetzel's Pretzels, has been transformed into one of the most pristine in the company's chain.
In recent months, workers installed new track lighting and built sleek displays for baby products and clothing at the store, which is nearly 20 miles from Manhattan. They rearranged the grocery section to be larger and redid the beauty aisles to be more welcoming. Even the back rooms have been renovated to make it easier for employees to transport items like paper towels and cereal boxes to customers' cars for pickup.
It's a scenario playing out across the United States: The country's largest retailers are investing billions of dollars in their stores, even as more sales move online, in an effort to attract more shoppers and increase the efficiency of employees in physical stores.
“Target's new chapter is about growth and stores are critical to our strategy,” Michael Fiddelke, the company's chief executive, said in an email. “By investing in new stores and remodels, we are elevating the Target experience.”
Nearby, Target's rivals have initiated similar upgrades as each tries to gain a competitive advantage. Walmart, the world's largest retailer, has committed to remodeling 12 stores this year in New Jersey, with improved layouts and services. Dollar General plans to revamp some of its Northeast stores with an open format and more fresh foods.
In total, America's largest retailers are expected to spend at least $20 billion to remodel more than 12,000 stores this decade.
Retail executives said the benefits are worth the investment. Shoppers demand well-organized stores and fully stocked shelves so they can find what they're looking for quickly. Those looking to discover new clothing or cosmetics expect stylish displays like those found in fashion boutiques, even if the store also sells pruning shears and laundry detergent.
Although e-commerce sales have grown rapidly for many years, they still account for only about 18 percent of all retail sales, according to the Department of Commerce.
Attractive stores are needed to encourage people to buy online. “The in-store experience remains important in shaping the e-commerce brand,” said David Marcotte, an analyst at Kantar Retail IQ, a research firm. “Remodels are almost always the best way to do it.”
There is a financial benefit for retailers who renovate a store. Last year, the One Big Beautiful Bill passed by Congress included tax incentives for companies making capital investments. It allowed businesses to deduct the full cost of improvements immediately, rather than over time, saving money and improving cash flow.
“Retailers have a window to invest in improvements to their stores and benefit from this bonus,” said Mark Mathews, chief economist at the National Retail Federation, an industry trade group.
There is much room for improvement in retail store networks as they attempt to modernize. The increase in pick-up orders during Covid, for example, has pushed retailers to revamp their operations and reorient their parking lots and indoor packaging areas.
Order pickers often scanned the aisles with the customer's shopping list in hand and then walked out the front door to carry the items to cars waiting in the parking lot. Now, retailers have built specialized areas in stores where orders are sorted, with immediate access to separate parking spaces for vehicles. Employees save time organizing and distributing merchandise.
Walmart has done well in recent years by rebranding itself from a cheap discount store to a provider of fashion home goods, clothing, groceries and other essentials. It began a major remodeling process in 2023, announcing a $9 billion renovation project spanning 1,400 stores nationwide. Those efforts have continued, with plans to remodel 650 more of the company's massive supercenters and smaller neighborhood locations.
The Walmart supercenter in North Bergen, New Jersey, was one of the first prototypes. Staff relocated high-traffic areas, such as the pharmacy and cosmetics, away from the perpetually busy supermarket aisles to reduce congestion. They added new refrigeration units and digital price tags, which allow the headquarters in Bentonville, Arkansas, to change the price of products overnight to save workers hours of time they used to spend manually changing the price of each item.
“When you think about the billions of dollars we've invested in, it's to absolutely empower our associates, to position the customer to get the speed and quality they need,” Cedric Clark, Walmart US executive vice president of store operations, said in April after the company announced it would remodel additional stores.
It can take up to six months to remodel a Walmart, and sometimes a store will have to close for a period of time for workers to make major changes all at once, such as installing a new set of checkout counters with conveyor belts. Walmart declined to share how much it typically spends to renovate a single store.
American dollar and convenience stores are also getting a makeover. At Walmart competitors that have smaller stores, the process can be less intensive but still beneficial, executives said.
Dollar General, which has posted strong results in recent quarters as shoppers grapple with inflation and economic volatility, is working to remodel more than 4,000 of its more than 20,000 U.S. stores. The company has reinvented its traditional store format with a new design in response to demand from shoppers who wanted to scan the aisles more, Todd Vasos, the company's chief executive, told investors in March.
“This new format is designed to be more open and engaging, resulting in increased browsing and treasure hunting as customers are exposed to more categories as they browse the store,” Vasos said.
Older Dollar General stores that haven't been updated in seven years or more are being completely renovated, Vasos said. For newer locations, there is an incremental program that provides changes to physical facilities and merchandising that can affect up to 80 percent of a store.
Dollar General said it would spend up to $1.6 billion in the first year of its renovation project. Company executives said they expected sales at the fully renovated stores to increase about 6 percent.
7-Eleven, the convenience store chain, said in April it would remodel 7,000 stores in North America (more than half of its network) by 2030 as part of a turnaround plan. The retailer's parent company, Seven & i Holdings, said it expected sales to fall more than 9 percent this fiscal year, with North America performing poorly.
The company said it needed to improve its stores — improving the interior and adding more food options — to fend off competition.
“Consumer behavior is changing,” 7-Eleven said in a slide presentation presented to investors. The company said that to be successful it must have “reliably clean, welcoming and friendly stores.”
With its own renovations underway, the stakes are high for Target, which is trying to regain momentum after three years of declining sales. The retailer, once known for its “chic and cheap” products, has fallen behind in its merchandise offerings and in-store displays. Sales at existing Target stores fell 2.5 percent in the most recent quarter.
Fiddelke, who took the top job at Target in February, told investors that shoppers will experience more changes at Target's 2,000 stores this year than they have seen in a decade. Some of the stores haven't been significantly upgraded in up to 15 years, he said.
The moves are part of a $5 billion capital investment plan at Target, which has committed to hiring more store workers and increasing the number of hours employees can work to improve service in stores. Management is also reallocating space for new merchandise.
Company executives are counting on these investments to assist in their long-term recovery effort. Redesigning and refurbishing major stores like one in downtown Minneapolis, where Target is headquartered, can cost up to $10 million. Target said store sales typically increase in the low to mid-single digits after a remodel.
“It's not just the first and second year,” said Laurie Mahowald, Target's senior vice president of properties. “It makes that store more relevant for years to come.”
