'Target CEO claims customers are saying ‘a big thank you’ for locking up merchandise'

[ClownLoach]

The more often you have insurance claims, the more likely you lose your insurance-or pay higher rates.

Retailers are for the most part self insured because their deductibles for claims are typically between $100K and $1M per incident. Most Fortune 500 retailers file claims in the single digits annually (outside of workers comp and customer injury which is separate). So to be clear, because this is so misunderstood due to social media proliferation of false information, since no shoplifting loss is between $100K and $1M there is effectively no such thing as shoplifting insurance. The only retailers that have coverage typically are jewelry stores and they are paying tens of thousands of dollars a month per store for it.

[storewanderer]

I went to the Reno Target tonight. What a complete trainwreck of a store. This chain is beyond lost. I don't understand how it is so hard to stock the shelves with merchandise and pick stuff off the floor in clothing/shoes.

Also the pharmacy side doors are no longer open late at night, blocked off by carts. The 8 self checkouts on that side are also blocked off by carts (but not closed... you could use them if you moved the carts). So they had only 3 self checkouts (no cashiers) over by customer service. The store actually wasn't all that busy so the 3 self checkouts was almost adequate.

[ClownLoach]

I went to the Reno Target tonight. What a complete trainwreck of a store. This chain is beyond lost. I don't understand how it is so hard to stock the shelves with merchandise and pick stuff off the floor in clothing/shoes.

Also the pharmacy side doors are no longer open late at night, blocked off by carts. The 8 self checkouts on that side are also blocked off by carts (but not closed... you could use them if you moved the carts). So they had only 3 self checkouts (no cashiers) over by customer service. The store actually wasn't all that busy so the 3 self checkouts was almost adequate.

Every SoCal Target I've visited in the last week has been busy and looked stellar, really surprised because usually their routines break by about Dec. 15 and they don't get the stores back in order until Jan. 1st. Only problem area is Seasonal because they're ahead of plan on selling thru and are almost completely out of Christmas candy and such. Very little roll wrap left except a few designs customers obviously didn't like. Some stores have empty shelves and gondolas in this area waiting to be taken down and restored to the usual wider open valleys (Target usually builds about 4 gondolas into this area for extra Christmas holding capacity). Target obviously under bought with the pessimistic views on the economy and could have sold much more but they'll have nothing left to liquidate at clearance prices so I expect they're going to have strong margins. Walmart is severely overloaded on Christmas decor, lights etc. to the point where it's still stacked to the rafters, but I think they pack up and store most of the durable items like Christmas trees and lights which is typical for the industry so all of those items will not hurt them. They will still have a lot to go on clearance. I think they have way too many Christmas gift packs too. Costco has basically zero Christmas product left and they do their usual routine of moving anything that can be a gift into seasonal like mechanics tools and coffee makers. Their patio furniture is being set already.

I really wonder what it will take to get that Reno store into the spotlight for the cubicle dwellers in Minneapolis? That must be the worst Target in America. I really wonder how bad other one/two/three store markets look at Target as that might be a problem replicating itself across the chain. I was not impressed with my tour of Las Vegas early in December either, but I think that Vegas in general is really hurting as their homelessness and other issues have exploded. The stores are being hit very hard by shoplifting and I saw two cart runs, one while others were setting off fire exit door alarms in the back to create chaos for the store workers and security. It is quite shocking as they have an entire area now around the border of North LV that is on the level of Skid Row in LA or Burnside in Portland... Thousands of homeless people just sitting on the street near the shelter and resource centers. I'm not exaggerating the numbers either, for at least six blocks it looks like people waiting for the parade at Disneyland.

Executives must get into all stores instead of just visiting the urban locations in destinations they wanted to visit for free on the company dime. Clearly nobody at Target wants to see the Reno area. I'm betting on some activist firms trying to get on the board at Target, and they'll find these situations where for example as I observed Target is outperforming in SoCal but I will bet they've still got full trailers of Christmas seasonal in Reno (and they do not keep anything to next year, it all gets sold to salvage or donated). I have not seen Target items in salvage liquidators here. I wonder how much merchandise is never making it to the sales floor in the broken Reno stores and instead winds up sold to the salvage liquidators you've spoken of because of their broken operations. Eventually someone is going to get into management there, see these reports and identify the discrepancy, fly to Reno unannounced and the you-know-what is going to hit the fan.

[veteran+]

Targets in my area are tidy but the OOSs are very bad!!

[ClownLoach]

Targets in my area are tidy but the OOSs are very bad!!

Where are you seeing heavy OOS? Lego in toys is bad but that is by design (Lego replaces nearly every SKU on January 1st annually). I saw seasonal was bad.

I'm really thinking that if a Target has OOS issues that it is a four wall problem (broken store) or one or the stores that has way too much e-commerce business as I discussed elsewhere like Manhattan Beach which probably is moving 75% of their labor to this ridiculous Drive Up program and the entire store is being destroyed by it. If I see a store with in stock issues without the drive up issue, there are other signs of bad management in that location too (dirty store, bad recovery, bad service behavior, unproductive and unprofessional employees) like Moreno Valley and Garden Grove. I do not believe Target currently has the level of OOS issues they did as a company. Too many stores with 99%+ in stock in every aisle and backrooms that look very organized and reasonably full. So the real problem is inconsistent execution at the store level and we've identified multiple reasons for it (bad store management, bad district management, and/or overwhelming Drive Up business not supported with adequate payroll). Unfortunately, you know the areas where the OOS could all be theft too.

[veteran+]

Target across the Beverly Center

Target on Santa Monica Bl. and La Brea Av. in West Hollywood

Target on 4th St and La Brea near The Grove

Neat and Clean and Out of Stock

[bryceleinan]

I went to the Reno Target tonight. What a complete trainwreck of a store. This chain is beyond lost. I don't understand how it is so hard to stock the shelves with merchandise and pick stuff off the floor in clothing/shoes.

Also the pharmacy side doors are no longer open late at night, blocked off by carts. The 8 self checkouts on that side are also blocked off by carts (but not closed... you could use them if you moved the carts). So they had only 3 self checkouts (no cashiers) over by customer service. The store actually wasn't all that busy so the 3 self checkouts was almost adequate.

I don’t get the Reno Target either - my mom and I both said “don’t bother” last time we went in there. I’m halfway surprised Target hasn’t closed it yet with how bad it is - not sure if this is a lack of help thing, the neighborhood demographics changing or what the problem is.

[ClownLoach]

Target across the Beverly Center

Target on Santa Monica Bl. and La Brea Av. in West Hollywood

Target on 4th St and La Brea near The Grove

Neat and Clean and Out of Stock

All high volume stores with high Drive Up orders (except 4th and La Brea which is just high drive up). Bet if you scanned the shelf tags with the Target App you find that nearly every item is in stock and in the back room. If you did a drive up order you'd probably get what you want. That is a big problem.

What has changed is that last year we all mocked Target for supply chain driven OOS, while we complained about broken Walmart stores with hundreds of pallets sitting out (and unbeknownst to most of us rotting pallets of unstocked food filling dumpsters sky high). Today Walmart has mostly fixed the broken stores that couldn't get the freight stocked (yes, they still have dirty stores, surly employees and messy shelves). Target has fixed the supply chain problems but now that they actually have the goods in stock they seem to have massively accelerating Drive Up orders now and they are not getting shelves restocked through the day.

One area I noticed in SuperTarget stores is that most of the refrigerated and frozen goods were SKU rationalized and completely reset the first week of November. It appears they cut the bottom 20% of SKUs in refrigerated sections entirely, and double/triple/quadruple faced the bestsellers. It's working incredibly well as now dairy, deli, frozen etc. all look fantastic everyday in the Super format that has enough holding power in the coolers and freezers to get through the day without restocking. There's only one item I'm upset they got rid of and it's available elsewhere and frankly I should not buy it anyway (whipped butter tubs are gone). Then they shifted all the labor that used to be dedicated to filling refrigeration all the way to the produce area where they are constantly stocking, culling, and recovering. For the first time their produce looks great whenever you go in (even if some of the sourcing is funky) and there is always at least one or two employees in that critical area to assist customers. So in SuperTarget high volume stores they're able to keep that food area up, but the regular P-fresh stores have a fraction of the space in most departments - a problem made worse by the P-fresh addition that eliminated double facings and tightened up displays storewide. Will be interesting to see if this initiative is spread to the rest of the store so they can stop refilling the same holes on shelves multiple times per day while other items never sell and just sit there. They need this strategy in every department in the store immediately.

[storewanderer]

Every SoCal Target I've visited in the last week has been busy and looked stellar, really surprised because usually their routines break by about Dec. 15 and they don't get the stores back in order until Jan. 1st. Only problem area is Seasonal because they're ahead of plan on selling thru and are almost completely out of Christmas candy and such. Very little roll wrap left except a few designs customers obviously didn't like. Some stores have empty shelves and gondolas in this area waiting to be taken down and restored to the usual wider open valleys (Target usually builds about 4 gondolas into this area for extra Christmas holding capacity). Target obviously under bought with the pessimistic views on the economy and could have sold much more but they'll have nothing left to liquidate at clearance prices so I expect they're going to have strong margins. Walmart is severely overloaded on Christmas decor, lights etc. to the point where it's still stacked to the rafters, but I think they pack up and store most of the durable items like Christmas trees and lights which is typical for the industry so all of those items will not hurt them. They will still have a lot to go on clearance. I think they have way too many Christmas gift packs too. Costco has basically zero Christmas product left and they do their usual routine of moving anything that can be a gift into seasonal like mechanics tools and coffee makers. Their patio furniture is being set already.

I really wonder what it will take to get that Reno store into the spotlight for the cubicle dwellers in Minneapolis? That must be the worst Target in America. I really wonder how bad other one/two/three store markets look at Target as that might be a problem replicating itself across the chain. I was not impressed with my tour of Las Vegas early in December either, but I think that Vegas in general is really hurting as their homelessness and other issues have exploded. The stores are being hit very hard by shoplifting and I saw two cart runs, one while others were setting off fire exit door alarms in the back to create chaos for the store workers and security. It is quite shocking as they have an entire area now around the border of North LV that is on the level of Skid Row in LA or Burnside in Portland... Thousands of homeless people just sitting on the street near the shelter and resource centers. I'm not exaggerating the numbers either, for at least six blocks it looks like people waiting for the parade at Disneyland.

Executives must get into all stores instead of just visiting the urban locations in destinations they wanted to visit for free on the company dime. Clearly nobody at Target wants to see the Reno area. I'm betting on some activist firms trying to get on the board at Target, and they'll find these situations where for example as I observed Target is outperforming in SoCal but I will bet they've still got full trailers of Christmas seasonal in Reno (and they do not keep anything to next year, it all gets sold to salvage or donated). I have not seen Target items in salvage liquidators here. I wonder how much merchandise is never making it to the sales floor in the broken Reno stores and instead winds up sold to the salvage liquidators you've spoken of because of their broken operations. Eventually someone is going to get into management there, see these reports and identify the discrepancy, fly to Reno unannounced and the you-know-what is going to hit the fan.

Since I saw good stores in Arizona I know they can still do it... had I not seen those... I've been into a couple Las Vegas Stores this fall also, didn't look great, but not really bad. Just sort of lifeless. Not even close to the out of stock situation in Reno.

Reno is in the spotlight as much as it can be, but I don't think they care much about it. I think they are much more concerned with the urban markets as you point out, the shoplifting issues, etc.

Reportedly Target has reduced the amount of freight being sent to Reno because the store was having trouble keeping up with its freight. So the next problem is the store can't keep up with cycle counts either and there is I guess more shoplifting than expected so this leads to the empty shelves all over the store. I can see how this all happens but this is Target supposedly one of the best retailers in the US and I expect better control from them. This should not happen at Target. The amount of problems the store has, I think the company is aware, but doesn't seem to know how to fix it. They need to get more employees, better employees, and more disciplined employees. Store management has changed multiple times in the past few years and current management was externally hired last year based on my research on Linkedin. But they can't do a total re-staff to the store and it is very hard to hire entry level retail employees in Reno. The regional management is based in the bay area now (used to be Sacramento)... even further from the store. I think they are over-extended and these 3 stores in this market are just too far away. Years ago the Reno area Target units were in a Las Vegas district and that is fairly common for retailers but often doesn't work too well (Smiths was a disaster here back when they had that set up until like 2005). Not sure what the solution is but they need to find one.

Despite the Reno staffing problems many best in class retailers run excellent stores in Reno. Costco, WinCo, Scheels, Dillards all come to mind. Some of these don't pay particularly high wages either.

In the mean time the store posts very strong sales volume despite its issues.

This salvage operator who has all the Target stuff over on Oddie in Sparks is called Falling Prices. They work with Target and Amazon but in recent months in Sparks anyway their stuff is 90% Target. You would not believe the amount of Halloween they had and it was weeks and weeks worth of the stuff. They also had a ton of candy a couple weeks ago (I thought Target threw all that out), some even Target private label brands of nut trail mix things. Of course a number of those bags were punctured in the bins since Falling Prices uses snow shovels to stock its bins with merchandise. They have a lot of locations around Sacramento, based on the photos it is the same mixture of Target and Amazon stuff.

[veteran+]

"One area I noticed in SuperTarget stores is that most of the refrigerated and frozen goods were SKU rationalized and completely reset the first week of November. It appears they cut the bottom 20% of SKUs in refrigerated sections entirely, and double/triple/quadruple faced the bestsellers. It's working incredibly well as now dairy, deli, frozen etc. all look fantastic everyday in the Super format that has enough holding power in the coolers and freezers to get through the day without restocking. There's only one item I'm upset they got rid of and it's available elsewhere and frankly I should not buy it anyway (whipped butter tubs are gone)."

Exactly what I noticed!