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Apr 24, 2020
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Target's digital sales grew by more than 100% in March and are up 275% in April as consumers ordered more essentials and groceries online for delivery and pickup amid the coronavirus pandemic.

Though online growth accelerated dramatically, the Minneapolis-based retailer announced Thursday that in-store sales started to soften as millions sheltered in place.

In categories such as food and beverage and essentials, sales were up 20% in March. Apparel and accessory sales dropped by similar margins. Apparel is down more than 40% month-to-date in April.

Shares of Target fell 2.8% Thursday and closed at $103.86.

"Consumer behaviors continue to change dramatically, particularly as public health officials have told Americans to minimize their time in stores," Target CEO Brian Cornell said in a call with reporters to discuss the retailer's COVID-19 response.

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Online sales were up and total company comparable sales were up more than 7%. Target is spending $300 million in temporary benefits, wages and bonuses for workers, a COVID-19 measure announced in March that was scheduled to last at least until May 2.

Target said Thursday that it is extending the $2-an-hour temporary wage increase for employees and a paid leave program for workers most susceptible to the coronavirus until May 30. Employees 65 and older, pregnant or with underlying medical conditions can access paid leave for up to 30 days.

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When thousands of other retailers have had to temporarily shutter stores or switch to a purely online model, Target has reduced hours at its nearly 1,900 stores, dedicated shopping time for vulnerable guests, installed plexiglass partitions and started to limit the number of shoppers in stores to promote social distancing as of April 4.

That hasn't been enough to placate all workers. Target Workers Unite, an employee activist group, announced this week that some workers plan a mass sickout May 1 because they don't feel the efforts go far enough to prioritize their safety.

"I think the majority of our team feels as if we're doing everything possible to protect them, to make sure we're creating a safe environment for our team and our guests, and we'll continue to make sure we focus on that throughout the pandemic," Cornell said.

Other measures Target has taken include staffing drive-up curbside pickup and hiring 80,000 workers for its Shipt grocery delivery service.

"In April, we've seen weeks when drive-up volume was up to seven times greater than normal and single days in which order pickup volume was twice as high as Cyber Monday," Cornell said of the contactless shopping options.

Cornell said the shift toward digital is "likely to be long lasting as guests continue to weather the crisis" and they develop new routines from being home with their families.

"We certainly expect that there's going to be changes consumers are going to make in how they live, how they shop, how they work and what they value," Cornell said. "We better make sure that we're agile enough to respond to those changes. We recognize that there's going to be several more months where there's going to be significant concern, as we work through this pandemic."
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