That includes trying to rein in costs in a way that customers won't notice. That may be difficult given that a key target is hourly payroll expenses. Michaud says Target is investing in technology to make sure workers are scheduled at the right times. Unlike some of its competitors, Target is sticking to its plan to open stores, about 100 of them, which Michaud says is consistent with the number it has opened in recent years.
The chain is also preparing for the departure this year of designer Isaac Mizrahi, who has a line of popular private-label apparel at Target but is leaving to join Liz Claiborne. Spokeswoman Susan Giesen says Target will still offer apparel from trendy designers, which, along with the new Converse All-Star apparel and footwear line, should fill any gaps in its clothing lines.
That might not be enough to keep clothing customers loyal. Based on BIGresearch's survey data on people who shop at Target primarily for at least one category of merchandise, these consumers are shopping around. "The folks who shop at Target for health and beauty aids — a lot of them go to Kohl's, Macy's and Penney's first for clothing," says Phil Rist of BIGresearch. "There's a lot of cross-shopping."
Contributing: Erin Kutz