America’s second-largest retailer, Target Corporation (NYSE: TGT), has announced that it is canceling expansion of its Target Auto Center program after numerous failures in a handful of Midwestern test markets in the past year.
After decades of expansion and head-to-head competition with much larger Walmart, Target has decided to limit its focus more directly on electronics, groceries, and soft lines, areas where the company has been more competitive in recent years. This move could leave only Walmart and Costco to compete in the lucrative automotive service segment, but Target’s CEO Brian Cornell insists that he is focusing on profitability over market share.
Among the findings that Target shared in its press release are:
- Eden Prairie, MN: Choice of oils limited to Castrol 10w-30 and Archer Farms Extra Virgin Olive. Both used interchangeably on customer vehicles.
- Duluth, MN: “Buy 5 tires and get a $5 Target gift card” promotion too unpopular to continue
- Various locations: Service manager states that tire rotations are not offered because the tires “Rotate automatically”
- Des Moines, IA: Three employee complaints listed for “Where to find 710 fluid for crankcase?”
- Various locations: Alignments almost always slightly left-biased
- Milwaukee, WI: Employees banned from using word “Tranny” in any context
- Minneapolis, MN and Chicago, IL: Six urban retail locations accidentally installed auto center upstairs with no escalators big enough for vehicles
- Madison, WI: Ban on phallic symbols prevents store from offering spark plugs, oxygen sensors, other services.
Shareholders rewarded Target’s announcement by driving the stock price up over 11% by midday. This one-day increase is second only to Target’s 14% jump on its announcement last year that it would close all remaining garden centers after it was found 80% of them harbored employee marijuana cultivation operations.