However, Fiddelke's extensive experience at Target since 2003—spanning roles in merchandising, HR, operations, finance, and most recently as COO—may provide valuable institutional knowledge as the company attempts to return to basics.
"I think when you have a more holistic knowledge of a company, I think you have a little bit of a head start when you're coming into a CEO role versus an outsider who would maybe have to take a little bit of time to get to know the business," said our analyst Arielle Feger.
Macroeconomic headwinds hit Target's product mix particularly hard
In Q2 2025, Target reported its 11th consecutive quarter of flat or falling sales, with comparable sales down nearly 2%.
The retailer’s sluggish sales are largely due to its product assortment, which has been affected by shifting consumer spending patterns during economic uncertainty.
- "Home furnishings take up a big chunk of their business and they're also very dependent on beauty sales," said Droesch. "For furniture and other discretionary items like consumer electronics, sales have been very slow across the board over the last couple of years."
- This product mix problem has been worsened by what TD Cowen analysts describe as "bread over blazers"—consumers prioritizing essentials over discretionary purchases.
Walmart's expansion into Target's customer base
Target is facing competitive pressure, particularly from Walmart's strategy to attract middle and upper-middle-class shoppers.
"Walmart is an attractive place for grocery shopping. They've brought in a lot of higher-end consumers and once they are in the Walmart store, they then have access to all of the other product categories that maybe that type of shopper would historically go to a Target for," Droesch said.
As Walmart expanded its appeal beyond its traditional customer base, Target has lost its market position, particularly as its in-store experience—once a key differentiator—has deteriorated.
Cultural controversies damaged Target's brand reputation
Target's handling of social issues has created additional headwinds for the retailer.
The company faced backlash over its Pride Month product reduction in 2023, followed by controversy when it had to remove Black History educational items that misidentified key individuals.
These controversies intensified in early 2025 when Target rolled back elements of its DEI initiatives, further straining its brand reputation.
- Boycotts following the DEI retreat wiped $12 billion of market value off the company in just one month, according to The Charlotte Post.
Because Target has a more progressive base of customers than many of its competitors, these controversies are particularly damaging.
- Organizers of consumer boycotts have stated they viewed Target's actions as “a greater betrayal because the company previously had held itself out as a champion of inclusion,” according to the AP.
New CEO's priorities focus on retail fundamentals
Fiddelke has outlined three urgent priorities: reclaiming Target's leadership in merchandise selection and display, improving the customer experience through consistent stocking and cleanliness, and investing in technology.
"It's just getting the fundamentals right, getting back to basics," Droesch said. "The benefit of Fiddelke, of having an insider step in and take the reins here is this is a guy who knows retail. And retail is, it's an infinitely complex business to get very simple things to run correctly."
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This article was prepared with the assistance of generative AI tools to support content organization, summarization, and drafting. All AI-generated contributions have been reviewed, fact-checked, and verified for accuracy and originality by EMARKETER editors. Any recommendations reflect EMARKETER’s research and human judgment.
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