The Minneapolis-based retailer, which plans to start hiking minimum pay across its stores to $11 an hour in October, provided assurances that the move would not hurt its previously announced full-year and quarterly earnings forecasts.
Amid increasing competition for workers in a strengthening labor market, the “Fight for Fifteen” movement -- a union-led push for a $15 minimum wage -- has been gaining traction in cities across the country.
Target’s decision comes less than three months after the Minneapolis City Council approved a measure requiring large companies to pay workers least at $15 an hour by 2022, following decisions by other liberal-leaning U.S. cities to raise the minimum wage.
The retailer, which employs more than more than 323,000 people, said the $11 hourly wage would also apply to the more than 100,000 workers Target is hiring for the holiday season.
Chief Executive Brian Cornell told reporters on a call that Monday’s decision would leave Target better prepared for the upcoming holidays, helping the retailer to attract new employees and retain existing workers in an increasingly complex retail environment.
Target, which does not typically make wage increases public in this manner, previously raised minimum pay by a dollar in both 2015 and 2016, pressured by labor groups and a competitive job market driven by minimum wage increases at Wal-Mart Stores Inc (WMT.N).
Wal-Mart, the largest retailer and private sector employer in the United States, last raised its minimum wage for store workers in 2016 to $10 per hour.
Target, which has been investing heavily this year to drive traffic and compete with online rivals, said it still expects third-quarter adjusted earnings of between 75 and 95 cents a share and full-year adjusted earnings of $4.34-$4.54 a share.
Last month, the company reported its first increase in comparable sales in five quarters, raising expectations that its turnaround plans under Cornell were taking hold.
Reuters
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