It is no big secret that the retail industry is suffering; or, rather, that the traditional retail platform is taking a beating from the online retail environment. But not only are customers fleeing the market, workers are also emigrating away from traditional companies and flocking to online firms that can offer more flexibility and other benefits, if not higher pay.
As such, Target Corp has just announced a plan to raise its minimum hourly wage to $11, starting next month. This is only the beginning, though, as the plan is to continue the increase with another bump to $15 by the year 2020. At the same time, the retailer has not indicated if this would affect all of its approximately 323,000 eligible employees, nor have they specified how the pay increases would affect the company’s expenses. There is some talk that this wage increase could apply to the 100,000 temporary workers the retailer will acquire during the upcoming holiday season.
The Minneapolis-based retailer made this decision no more than three months since the Minneapolis City Council approved a labor measure which would require large companies to pay workers a minimum of $15 per hour by 2022. This measure, of course, comes on the heels of other cities already instituting such a policy across the United States.
Target CEO Brian Cornell told reporters, this week, on a call with the media: “Making this investment in our Target team will allow us to continue to recruit and retain strong team members to serve our guests.” But this is probably more than just a “retention” thing, as the 100,000 seasonal hiring projections for this year is a 43 percent jump from last year.
Most importantly, perhaps, Target has seen comparable sales rose about 1.3 percent over the most recent quarter. This is better than they had originally expected. Shopper store visits are up 2.1 percent even while e-commerce has grown 32 percent. This shows, the, that Target might have found the delicate balance between physical stores and digital sales. Obviously, it helps to have stores available for customers to pick up online orders, but Target has also finessed customer service in apparel and beauty so that those who are buying clothing or makeup, for example, can have more specialized attention.