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Target Extends Pay Increases & Benefits as Digital Sales Soar

Target Corp. is extending pay increases and enhanced benefits for workers as they continue to come in amid the coronavirus pandemic.

The Minneapolis-based company today announced that it will extend temporary wage increases of $2 an hour through May 30. Also until the end of May, Target will continue to provide extended access to backup care for employees, as well as 30-day paid leave for those who are 65-plus, have underlying medical conditions or are pregnant.

“We have deep gratitude for the remarkable effort our team has put into supporting guests across the country. We remain committed to prioritizing our efforts to provide for their well-being so they can take care of themselves and their families during this unprecedented time,” Target Corp. CEO and chairman Brian Cornell stated.

These measures follow the company’s announcement last month anticipating more than $300 million in additional first-quarter costs, driven by the increase in worker pay and benefits, more merchandise volume and investments in rigorous cleaning procedures in stores and distribution centers during the crisis.

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While Target stores have stayed open amid the coronavirus crisis, sales patterns have shifted as panicked shoppers stock up on groceries and reduce their discretionary spending on nonessential items. For the first quarter, which began Feb. 2, Target has so far seen overall comp sales grow by more than 7%, with a slight decline in store sales and growth of over 100% across its digital channels. The big-box chain has also seen gains of more than 20% in comp sales across essentials, food and beverage — but the apparel and accessories category has slid by over 20%. This shift, Target says, has been toward lower-margin categories. That — coupled with markdowns in apparel and accessories and increased pay and benefits for workers — is expected to cause the company’s Q1 operating margins to fall by over 5%.

To protect workers at its stores and distribution centers, Target said recently that it has taken several steps, such as providing face masks and gloves to all employees and enhancing its cleaning processes. Further, the company is providing thermometers to workers to have them check their temperatures before coming into work. The retailer has also implemented social distancing procedures at its facilities, including monitoring store occupancy to allow more space per person in line with Centers for Disease Control and Prevention recommendations.

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