·  Legal News, Analysis, & Commentary


Target Invests Heavily in Employee Safety as Online Sales Skyrocket

— May 29, 2020

Target see a huge spike in online sales, but this is offset by pandemic investments.

While Target’s online sales have skyrocketed during the pandemic, with the company reporting quarterly online purchases up a whopping 141%, the popular retailer has also had to set aside $500 million to spend on maintaining safety standards at stores and pay employees higher hourly wages.  This means that supply chain and labor costs have offset added profits.

“Last quarter was unlike anything I’ve ever seen,” Chief Executive Officer Brian Cornell said. “It was intense, it was volatile, it was stressful for our guests and the country.”

At the start of the quarter, Target benefited from frightened consumers insisting on stockpiling necessities in a time of uncertainty.  As the lockdown ensued and stimulus checks were issued, demand soared for other store items.  Cornell said he “expects demand for non-staple items like beauty products, home goods and clothes to continue into the current quarter.”  Digital sales include those made for curbside pickup as well as home delivery.

Target Invests Heavily in Employee Safety as Online Sales Skyrocket
Photo by Charles Deluvio on Unsplash

Target has opted to pull its financial projections for 2020 and announced it would scale back planned investments.  It has shifted its focus and placed a greater emphasis on employee safety.

“There’s just so much uncertainty as I think about the balance of the year.  Obviously we’re watching closely to see what happens from an economic standpoint,” Cornell said.

He also announced this month that Target will extend a $2-an-hour temporary pay increase for its employees through July 4.  This is the second time Target has extended the temporary pay increase. The retailer will also continue other employment benefits through the end of June, such as its thirty-day paid leave for high-risk workers with underlying health conditions.  The extension will help curtail the risk to the company of having workers go on strike, fearing for their health and safety.

Initially, it was reported that “Target employees are planning a mass sickout May 1, which is International Workers Day,” according to Adam Ryan, a part-time employee and liaison with the advocacy group Target Workers Unite.  He insisted back in April, “The safety measures that Target has rolled out are half-measures, and they haven’t done enough to prioritize safety.  They’re more concerned about the sales then protecting us workers.  If we don’t push them further, they’re not going to take further measures.  We can’t afford to wait.”

“At the outset of the pandemic, we knew there was a long road ahead, that we would have to pace ourselves,” Cornell said. “These pay and benefits extensions are intended to help you and your family do just that as we all continue to support each other and move forward.”

The company’s net earnings fell 64.3% to $284 million in the quarter due to the labor and supply chain costs.  On an adjusted basis, the company earned 59 cents per share.  Overall, Target’s stock has jumped 74% in the past year.

Various Target locations have reported positive COVID-19 tests among workers since the onset of the pandemic.  Each time, the company has insisted immediate precautions were taken, including sending ill employees home on paid sick leave to quarantine and thoroughly sanitizing its stores.  Other retail giants such as Amazon and Walmart have also noted an uptick in online sales and have put into place procedures for handling positive coronavirus cases.


Target’s online sales surge eases coronavirus pain

Target’s digital sales climb 141% during pandemic

Target extends $2-an-hour coronavirus pay bump through July 4

Amazon and Target workers plan ‘sickouts’ over coronavirus safety concerns

Join the conversation!