The new selection of the CEO of Target raises doubts about its needy brand restart

The objective needs a hard restart in the strategy, believes wall street. And the new CEO Michael Fiddelke may not be the person who does it.

The retailer has lost the performance brand during many quarters, with sales brands after a maximum pandemic, since he could not deliver what buyers currently want: a wide variety of good quality groceries and essential elements at low prices, quickly delivered to their homes. Fiddelke, a veteran of the company of more than two decades who recently led an effort to eliminate complexity and expand the use of technology in Target, established its priorities on Wednesday, without surprising analysts in a gain call.

“We must restore our marketing authority in a clearly objective way,” he said. “We want guests to find a sense of joy of each trip to Target and we must do it more consistently and frequently. And third, we must use more completely technology to improve our speed, guest experience and efficiency throughout the business.”

He did not describe what he meant with a brand of “distinctive objective”, beyond saying that the company needed to claim its leadership in assortment, style and design of products. Several analysts said the company had lost the way.

“The objective seems to be experiencing a kind of identity crisis,” said Jamie Meyers, a senior analyst at Laffer Tengler Investments, which has actions of Walmart rivals and the Electronic Commerce Commerce Amazon.com, but not Target.

“It is not clear what they represent, since they are not an offices retailer, a low -budget chain, a dollar store or a direct competitor of Walmart or Amazon,” said Meyers, who believes that Target needs someone from outside as CEO to obtain a new perspective.

A person who acts as an electronics consultant for Target told Reuters that the company was disorganized and made slow decisions, postponing many suppliers, which is reflected in their stores. “They knew who his buyer was and how to please them, but now they have forgotten that,” said the person.

Walmart, for example, is attracting customers with higher revenues with their 400 million online products that are rival only by Amazon. The objective, once known for its cheap and chic and marketing products ready to use, has not been able to excite buyers with recent links such as Kate Spade, a dining room that is weighing in their parents' profits.

“Many in the market favored external hiring, arguing that this would be the only way to revitalize this retailer and boost its strategic reinvention,” said Michael Lasser, UBS analyst. Even so, Fiddelke is likely to be seen as a couple of safe hands, since he has already supervised a large efficiency unit, said Susannah Streeter, director of money and markets, Hargreaves Lansdown.

Target shares have dropped 23% in the last five years, during which Walmart has increased 125% and Costco has more than tripled. Walmart, scheduled to inform the profits on Thursday, has long sacrificed the margins for the high sales volumes, especially in the supermarket. He has pumped money to expand his scope of domestic delivery and take an example of Amazon, included a subscription to Paramount+ streaming with his annual membership.

The goal takes on the same as Walmart, but without the movies.
Expanding your electronic commerce business and building a delivery infrastructure has been one of Target's biggest challenges. In addition, the discrearly merchandise of high margin of the company for some years has not resonant with buyers as their budgets are reduced due to inflation and, more recently, tariffs, analysts said.

The company withdrew its support for diversity, postpone some clients and, in the face of persistent robbery, simply locked many goods. Fiddelke acknowledged many of these problems on Wednesday, saying that Target was “urgently adjusting” to tariffs and changing the needs of consumers, adopting technology to automate manual work and working to repair problems such as slow decision -making, reassured internal objectives and lack of access to quality data that would boost better inventory planning.

However, there are doubts. “The objective of a Board is to challenge the thought to ensure that good decisions are made. The Target Board and the senior team do not seem to do this,” said Neil Saunders, managing director of the GlobalData data analysis firm. “They almost exist in its own bubble.”