Target will reinvent three-quarters of its home merchandise by June and since groceries are driving customer visits, it will remodel several hundred stores to expand and improve its food and beverage selections.

The Minneapolis-based retailer is hosting hundreds of investors, analysts and journalists at its annual investors meeting March 3, which is being held in Minneapolis for the first time since 2018.

CEO Michael Fiddelke and his executives have been unveiling details of how the Minneapolis-based retailer will spend more than $2 billion this year to break out of a funk.

There’s a lot riding on the turnaround plan after three years of sluggish sales and a big drop in profits last year.

Target has lost market share in the home category for two years in a row and brought in Mara Sirhal to turn it around. For starters, the company will cut their product offerings in half to do a better job with fewer items.

After a reset of most of the home assortment in June, a bedding refresh will come in the fall, followed by changes to home departments in stores, said Sirhal, senior vice president of home merchandising. Kitchen and dining updates will come in 2027.

“Style, design and value are a part of everything we do, and that will come through loud and clear today,” Fiddelke said in opening the day.

Later in the morning he said employees have been ”gathering feedback from those who love us to those who don’t” to come up with the best ideas.

While improving merchandise and stores are his top priorities, he said he also wants to strengthen the Target culture as well.

The company is unveiling its turnaround plan after releasing its holiday quarterly results, including another 2.5% same-store sales slide while competitors like Walmart saw gains.

Investors are watching closely after the holiday season saw a 5% decline in profits. The Minneapolis-based retailer predicts a small bump in sales this fiscal year.

“While senior management is taking the necessary steps to re-position the business, others are not standing still,” wrote Mizuho analyst David Bellinger in a pre-earnings note. “much work lies ahead, yet we do not necessarily expect the company to have its full attack plan ready to go on Tuesday.”

The changes in store layout to accommodate its grocery strategy will allow for enhanced bakery displays and an expansion of fresh food, by double in half the stores being remodeled.

John Conlin, Target’s senior vice president of food and beverage merchandising, said over 50% of Target shoppers have food in their basket and that food “has never been more important at Target than today.”

The retailer is opening an additional 500,000-square-foot facility in Colorado to better support its fresh food supply chain.

He added that Target’s grocery business has picked up market share in the last year, specifically in beverages, seasonal options and fresh food. But it has increased competition from Walmart, where much of its food section growth has come from higher-income households.

The retailer also plans to lean into “accessible wellness” in selections such as snacks.

Target also will continue to invest in strong performing areas such as its beauty department, which continued to see growth in the holiday quarter.

Amanda Nusz, Target’s vice president of merchandising in essentials and beauty, said the retailer’s beauty section has seen over a decade of consistent growth and that the company over performs with younger guests.

Target’s partnership with Ulta will end in August, at which point the retailer will phase in a “Beauty Studio” with its prestige selection of beauty products. Nusz said the decision was based on customer insights that show people are cross-shopping, meaning they’re buying products from a variety of brands and price points.

The retailer is also planning to add a mini men’s “destination” area in stores.

Executives have attributed some of the store’s slump to weaker discretionary spending, particularly in home decor and apparel. As part of the turnaround, Target plans to revamp the presentation of its baby and home goods departments.

It also is refocusing on essentials and curations in apparel and accessories.

Gena Fox, Target’s senior vice president of apparel and accessories, said denim, tank tops and tees account for 25% of its assortment.

The store saw denim sales rise 10% last year, but the tees and tanks did not connect with shoppers, Fox said.

The retailer has developed an AI tool called “Target’s Trend Brain” that allows the company to catalog trends in hours instead of weeks so designers can immediately start crafting new ideas.

Fox also said the retailer will be introducing smaller, more frequent partnerships, including one with country singer Megan Moroney.

Target announced a limited-time collection with Roller Rabbit, a fashion and lifestyle brand known for its 100% cotton pajamas and brightly patterned children’s clothing. The retailer is also expanding its existing partnership with Levi’s to an additional 150 stores by the end of the year.

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