Major U.S. retailers are accelerating investments in store remodels and expansions as competition intensifies between physical retail and rapidly growing e-commerce channels.
Online retail spending in the United States reached $1.34 trillion in 2024 and is projected to surpass $2.5 trillion by 2030, according to Capital One Shopping.
However, physical stores still dominate global retail spending. Physical locations generated approximately $14.4 trillion of the $18.9 trillion in total retail sales in 2025, according to Euromonitor research compiled by EY.
That dynamic is reshaping retail strategy, with stores increasingly serving as fulfillment centers, customer experience centers and digital support networks.
Walmart’s store investments highlight broader retail trends
Walmart (WMT) remains one of the most prominent examples of this change. The company has invested heavily in its fleet of stores in the United States through its “Investing in America” ​​plan, a multimillion-dollar initiative that includes renovations, new Supercenters and its “Store of the Future” concept.
In the fourth quarter of fiscal 2026, Walmart reported $190.7 billion in revenue, up 5.6% year-over-year, and Walmart’s US net sales increased 4.6%, underscoring the continued momentum behind its physical retail strategy.
Target commits more than $5 billion to store expansions and remodels
To remain competitive, Target (TGT) is making a big effort to modernize and expand its store network.
In 2026, the company revealed plans to invest approximately $5 billion to remodel more than 130 existing stores and open 30 new locations across the U.S. The expansion targets 10 key metropolitan areas, including Atlanta; Austin, Dallas and Houston, Texas; Charlotte, North Carolina; Chicago; Phoenix; Los Angeles; Miami, Florida; Minneapolis; New York City; Philadelphia; and Washington, D.C.
“These investments aim to make Target an even easier, more inspiring and friendly place to shop,” Target Properties Senior Vice President Laurie Mahowald said in the company’s announcement. “We are evolving our stores to reflect how guests shop today, from more intuitive layouts to expanded assortments, while strengthening the role our stores play in fulfillment and our long-term growth.”
What Target is changing within its stores
Target’s remodels focus on improving in-store navigation, increasing product visibility, and integrating digital and in-store experiences more seamlessly.
Key changes include:
Expanded selection of groceries, pantry, fresh and frozen foods.
Updated layouts to improve navigation and product discovery.
Modern decor, LED lighting and updated signage.
Enhanced product displays across apparel, beauty, accessories and home.
Faster fulfillment improvements for order pickup, vehicle transportation, returns, and payment
Enhanced guest services, including restrooms and nursing spaces
Sustainability upgrades, such as energy-efficient HVAC systems and LED lighting in select locations
Target reveals plans to invest $5 billion to remodel more than 130 existing stores and open 30 new locations across the United StatesSharkshock/Shutterstock.com
Why Target sees brick-and-mortar stores as a competitive advantage
Target’s strategy reflects a broader shift in retail toward combining physical stores with digital fulfillment capabilities.
The company reports that about 76% of American households are located within 10 miles of a Target store, making its physical footprint a key advantage for services like Drive Up, order pickup, and same-day and next-day shipping.
Previous coverage by Fernanda Tronco on retail strategy:
The initiatives reflect a growing industry push to use stores as last-mile fulfillment assets, helping retailers reduce delivery costs while increasing speed and convenience for customers.
Target also notes that remodeled stores typically generate low- to mid-single-digit sales growth, along with increased customer traffic and engagement, making remodels a key driver for long-term growth.
The heavy investments come as Target works to reverse slowing growth and declining sales.
In the fourth quarter of fiscal year 2025:
Net sales fell 1.5% year over year.
Operating income fell 5.9%.
Comparable sales fell 2.5%.
Target experienced its fourth consecutive quarter of declining store traffic.
Comparable in-store sales decreased 3.9%, while digital increased 1.9%, reflecting a continued channel shift toward e-commerce.
“Our team is firmly focused on writing Target’s next chapter of growth, based on strengthening our merchandising authority, providing an elevated and differentiated shopping experience, advancing our use of technology, and continuing to serve and invest in our team and communities,” Target CEO Michael Fiddelke said in the earnings report.
Despite the declines, categories such as Food & Beverage, Beauty and Toys generated net sales growth, while Essentials and Home improved from the prior quarter, supporting Target’s emphasis on grocery expansion and merchandising improvements.
Target’s multi-year growth strategy
In addition to its March 3, 2026, earnings release, Target unveiled a broader multi-year plan designed to restore sustainable growth through store modernization, investment in technology and workforce development, according to the company’s announcement.
“This new chapter of growth at Target is defined by clear decisions and rooted in a deeper understanding of our unique lane in retail, the customers we serve and the areas in which we are clearly positioned to win,” Fiddelke said in a statement.
The strategy is based on fundamental priorities:
Differentiate merchandising with curated assortments focused on style, design, cultural relevance and value.
Enhance the guest experience through improved in-store layouts and digital discovery for greater loyalty engagement.
Accelerate technology by improving personalization and making compliance systems more efficient.
Invest in the workplace and community by expanding training, professional development and employee support initiatives.
Why physical stores are still important in modern retail
Target’s investments reflect a broader transformation in which physical stores are being redefined as hybrid spaces that combine shopping, fulfillment and brand experience.
Industry experts note that stores continue to play a critical role in retail profitability.
Target’s $5 billion investment program signals a clear strategic shift in which brick-and-mortar stores remain critical to retail growth, but their role is rapidly evolving. Rather than serving solely as transactional spaces, stores are becoming critical components of a broader digital physical retail ecosystem designed to drive convenience, engagement and long-term customer value.
Related: Long-standing supermarket chain closing stores and exiting key markets
This story was originally published by TheStreet on May 14, 2026, where it first appeared in the Retail section. Add TheStreet as a preferred source by clicking here.
