Inside This Issue - News
Cornell asked to ‘move Target forward’
August 11th, 2014
MINNEAPOLIS – Target Corp. has appointed Brian Cornell chief executive officer and chairman of the board.
Cornell is the first outsider to occupy the CEO’s position at Target. He most recently was CEO of PepsiCo Inc.’s Americas Foods division and previously served as president and CEO of Sam’s Club.
“As we seek to aggressively move Target forward and establish the company as a top omnichannel retailer, we focused on identifying an extraordinary leader who could bring vision, focus and a wealth of experience to Target’s transformation,” says Roxanne Austin, interim nonexecutive chair of the Target board. “The board is confident that Brian’s diverse and broad experience in retail and consumer products as well as his passion for leading high-performing teams will move Target forward.”
At PepsiCo, Cornell headed the largest of the consumer packaged goods giant’s divisions, consisting of Frito-Lay North America, Quaker Foods and the company’s Latin America food and snack business, together generating 2013 sales of $25 billion. Prior to that, he was president and CEO of Sam’s Club from 2009 to 2012, overseeing changes and initiatives that resulted in improved results at Walmart’s membership warehouse club division.
Cornell’s previous retail experience includes a stint as CEO of Michaels Stores Inc. and service at Safeway Inc., where he was executive vice president and chief marketing officer, overseeing the supermarket operator’s marketing, merchandising, manufacturing, distribution and online home delivery operation.
Earlier, Cornell had held a number of leadership roles at PepsiCo, including president of Tropicana, president of PepsiCo beverages for Europe and Africa, and president of PepsiCo North America Foodservice.
“I am honored and humbled to join Target as the first CEO hired from outside the company,” Cornell says. “I am committed to empowering this talented team to realize its full potential, lead change and strengthen the love guests have for this brand.
“As we create the Target of tomorrow, I will focus on our current business performance in both the U.S. and Canada and on how we accelerate our omnichannel transformation.”
Cornell’s appointment fills the vacancy created by the exit of Gregg Steinhafel in May.
John Mulligan, who returns to his normal role as chief financial officer, had served as interim CEO.
Steinhafel, whose entire retail career has been at Target, had succeeded Robert Ulrich in 2008 and launched a number of initiatives intended to fuel Target’s future growth, including entry into the Canadian market; development of the PFresh format, intended to drive traffic and sales by offering a limited assortment of groceries and fresh food; development of the CityTarget format, to enable the retailer to penetrate high-volume urban markets; and, most recently, development of TargetExpress, a true small-format outlet capable of competing with dollar stores and drug stores, not to mention Walmart Express, the small-box format developed by Target’s main rival.
TargetExpress, which just debuted in a single test location near the University of Minnesota, measures about 20,000 square feet and combines limited grocery, general merchandise and pharmacy items. The Minneapolis Star Tribune described the store as feeling “like a drug store along the lines of a CVS or Walgreens.” According to media reports, the retailer plans to open four more units in 2015.
Steinhafel’s tenure was dogged by a succession of mounting problems, starting with a bungled relaunch of Target.com, slackening sales growth in the United States, a catastrophic entry into Canada that is still nowhere near profitability and, finally, a massive data breach late last year that drove away customers and gutted holiday sales, resulting in Target’s first decline in earnings in five years.
Cornell consequently has plenty of hurdles to overcome and decisions to make, including whether to continue Target’s Canadian venture, how to revive sales growth and, in time, whether to proceed with the format initiatives that are in test.