Target to Raise Hourly Wages to at Least $9 Next MonthMatt Townsend
Target Corp., the second-largest discount retail chain, will raise employee pay to at least $9 an hour this year, following in the footsteps of Wal-Mart Stores Inc. and TJX Cos., a person with knowledge of the matter said.
Target will make the change next month, though there won’t be a formal announcement, said the person, who asked not to be identified because the move isn’t public. Wal-Mart, Target’s biggest rival, revealed plans in February to boost hourly pay to at least $9 by April and then to $10 by next February.
Retailers are putting more money in paychecks in an effort to reduce turnover and cope with an increasingly competitive labor market. Payrolls rose in 39 states in January and the unemployment rate fell in 24 of them, figures from the Labor Department showed Tuesday.
Wal-Mart’s move put pressure on Target to respond, Burt Flickinger, managing director at Strategic Resource Group in New York, said last month.
“It’s a competitive market for workers,” he said.
Target shares were little changed in New York trading, closing at $81.06. The stock has gained 6.8 percent this year, compared with an advance of 2 percent for the Standard & Poor’s 500 Index.
The pay bump contrasts with Target’s efforts to cut costs. The company has been trying to recover from a hacker attack and a failed expansion into Canada that led to billions in losses. In an effort to improve results, Chief Executive Officer Brian Cornell is eliminating several thousand positions at its headquarters in Minneapolis and curbing other expenses. In a wave of terminations earlier this month, Target notified 1,700 workers that they were losing their jobs.
At Wal-Mart, CEO Doug McMillon made the pay announcement after an earlier vow to stop paying any of its workers minimum wage. Less than a week after Wal-Mart said it would boost wages, TJX -- the owner of T.J. Maxx, Marshalls and other chains -- followed suit. Last year, Gap Inc. announced plans to increase hourly pay to $9 an hour in 2014 and $10 this year.
The Wall Street Journal previously reported on Target’s pay plan.