Target CEO: “Unacceptable” That Its Stores Have Empty Shelves

Target is trying to compete with Walmart on prices, and with Amazon on both price and delivery times. In all that confusion of fighting battles on different fronts, the retailer has had trouble doing one really important thing: keep its stores’ shelves stocked. And that, says Target CEO Brian Cornell, is not cool.

During Target’s quarterly earnings call on Wednesday, Cornell talked about the retailer’s “incredibly complex supply chain” that was developed for the pre-Internet business model that had products going from manufacturers to warehouses to store shelves.

But the CEO acknowledged that this linear way of thinking about the supply chain is now “outdated” with the intrusion of e-commerce. Target is now having to ship things directly from warehouses to shoppers, meaning some items never make their way to retail store shelves.

“Frankly, as a result, some retail fundamentals have started to suffer,” explained Cornell. “Specifically, in-stocks in our stores have been unacceptable so far this year. Our guests deserve better.”

Target’s John Mulligan, who is already the retailer’s Chief Financial Officer (and who acted as interim CEO before Cornell’s hiring), is being tasked with sorting out the supply chain issues under his new gig as Chief Operating Officer.

Mulligan told analysts that he’s investigating short- and longterm solutions to the issue so that can continue to grow without leaving Target’s retail shoppers from staring at bare shelves and wondering when their favorite store turned into Walmart.

Target CEO says store’s stocking problems are “unacceptable” [Star Tribune]

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