MINNEAPOLIS, MN - In its latest brick-and-mortar strategy, Target is keeping one hand on the thermostat and the other on a large stack of benjies. Translation: Target is turning up the heat on major competitor Walmart by raising minimum wage. According to a Reuters report, Target will increase its minimum wage in the States to $13 in June as a means of attracting retail workers in a tight labor market.
“We’re also well on our way to fulfilling the commitment we made in 2017 to raise our minimum hourly wage to $15 an hour by the end of 2020. We bumped it up to $11, and then to $12 last year. Today, we’re announcing the next move—to $13 an hour starting this June,” Melissa Kremer, Executive Vice President and Chief Human Resources Officer, wrote on Target’s Bullseye View blog. “So investing in our team members is essential to keep our business growing and thriving…I look forward to leading the team as we continue to provide our team members with new opportunities to grow professionally, take care of themselves and their families, and make a difference for our guests and their communities.”
Target’s latest move puts the retailer right up there with Amazon and Costco, two grocers that have led the industry in raising minimum wage to $15 and $14 an hour, respectively. Walmart, however, who seems to usually always be in this pack of top retail dogs, has not raised its minimum wage to match that of Target or Amazon. This has not gone unnoticed by Target, with Kremer pointing to last season's holiday success as an important win, particularly in the labor war.
"Just a year and a half into this journey, we’re already seeing some promising examples. Take this past Holiday, when we set out to hire 120,000 seasonal team members to support our teams during the big shopping rush," Kremer continued. "We were able to start them all at $12 or more—and that helped us reach our seasonal hiring goal ahead of schedule."
Reuters noted that Target employs over 300,000 workers and operates 1,854 stores across the nation—numbers that are both increasing, and fast. This year alone, Target opened more of its small-format stores and began its 300-store remodels, efforts that are helping the retailer adapt to changing shopping trends and stay in-line with its competitors.
With Target on-track to meet its minimum wage goal by 2020, will this inspire Walmart to follow suit? And how will this affect other retailers in the biz? AndNowUKnow will continue to report.
