Target isn't following in the footsteps of its biggest competitor when it comes to wages.
Just days after Walmart announced to much fanfare that it would raise its starting wage to $9 an hour in April, Target is continuing with its policy of constantly assessing wages and making changes as necessary, forgoing a giant, public pay raise for now.
The staff "has been a point of differentiation for Target," Chief Financial Officer John Mulligan said when asked on a conference call with investors to disclose average pay for workers. "We're all the time assessing the marketplace to determine competitive wages and making adjustments and we feel very confident that we pay the teams appropriately."
Target CEO Brian Cornell echoed the sentiment. "Our goal is to make sure we have the very best team in retail," he said, noting that the retailer aims to be "very competitive" when it comes to wages. But he added, "we do not expect to see any material change next year."
Both executives noted that the company invests in its talent. More than 60 percent of Target's team leaders started out as part-time, hourly associates, according to a Target spokeswoman.
Still, it's possible Target, the nation's second-largest retailer, will have to follow Walmart's lead at some point if the company wants to attract the best workers to a job in a notoriously low-paying industry. All workers at Target currently make above the federal, state and local minimum wages, a spokeswoman noted. Still, average wages for hourly workers aren't much more than that, according to Glassdoor.com, a self-reporting salary site. Sales floor workers make an average of $9.06 an hour and cashiers make an average of $8.83 an hour, according to the site. Next year, new hires at Walmart will earn $9 when they start and then earn $10 an hour after six months of training.
TJX Companies, the owner of T.J. Maxx, Marshalls and other stores, announced Wednesday that it would boost pay for its lowest-paid workers to $9 an hour. Experts pointed to Walmart's announcement as a sign of a tightening labor market. Walmart CEO Doug McMillon told CNBC last week that macroeconomic forces influenced the company's decision.
"It's great to see the job market getting better and the market works, so we're adjusting to that market, trying to make sure we're appropriately ahead of it and we'll continue to move if we need to," McMillon told CNBC.
McMillon also noted that giving workers a little more money in their pockets would help them serve customers better and increase sales. Target could use that kind of help. Once a favorite for middle-class shoppers looking for hipness on the cheap, Target is in the midst of a turnaround that includes emphasizing categories like style and wellness and boosting e-commerce. The company has been working to regain trust over the past several months after a massive credit card hack compromised personal information of up to 70 million customers.
The chain also announced last month that it would shutter all of its stores in Canada after a disastrous launch there. Still, there's room to be optimistic; the company reported a 3.8 percent increase in sales at stores open more than a year, an important retail metric.