Amid DEI controversy, Target makes a surprising move

In the past year, Target has faced everything from slowing foot traffic to national boycotts — some sparked by backlash to the company's changing stance on diversity, equity, and inclusion.

Critics on both sides accuse the retailer of either backing away from its values or alienating loyal shoppers. Social media has turned every in-store display into a political flashpoint.

Once praised for bold marketing and progressive merchandising, Target has struggled to strike a balance. Scaling back Pride displays and DEI investments only fueled more frustration.

Competitors have either doubled down or stayed quiet, leaving Target caught between culture wars and customer loyalty.

💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter💰💵

But while the discourse dominates online, Target has quietly made a pivot that’s flying under the radar.

It’s not happening in major cities. It’s not even happening in the suburbs. Instead, this shift is unfolding in small towns — the kind where for decades, big-box chains often declined to plant stores.

Target expands into smaller communities

Target (TGT) is now planting its flag in communities that long seemed overlooked. Bridgehampton, New York. Flemington, New Jersey. Selma, North Carolina. Seneca, South Carolina.

These aren’t test markets. They are full-size stores — often the largest retail additions these towns have seen in years.

It’s a departure from the company’s earlier strategy. From 2016 to 2021, the focus was on compact urban stores, squeezing 15,000 square feet of merchandise into dense neighborhoods in New York, L.A., and Chicago.

Now, the brand is going bigger — and more rural. These aren’t tiny outposts; they’re hubs. Literally. Target’s newer locations are designed to double as logistics centers for online fulfillment, part of a broader effort to close the delivery gap between Amazon (AMZN) and Walmart (WMT) .

According to the company’s 2024 annual report, Target plans to open around 20 new stores in 2025. And the locations on deck? Often miles from the nearest big-city core.

For small towns, this is more than just another store opening.

Target is going from controversy to calculated expansion.

Image source: Bloomberg/Getty Images

Target uses store growth and expansion to rebuild trust

Target isn’t just expanding — it’s reframing how it wants to be seen.

By moving into smaller, often more conservative markets, the company is carefully repositioning itself, not just physically, but also reputationally.

It’s a subtle image reset, carried out through location strategy instead of ad campaigns.

And there’s real business logic behind it. According to Modern Retail, developers in multiple towns said national brands were holding back — until Target showed up. Once the retailer committed, chains like Raising Cane’s and Ollie’s Bargain Outlet followed.

Target plans to invest $2 to $3 billion annually in growth, focusing on new stores and supply chain upgrades as it looks for fresh pockets of opportunity. These new markets aren’t just about convenience; they’re about unlocking long-term volume and loyalty.

That strategy also has operational upside. With 96% of online orders now fulfilled by stores, each new opening bolsters Target’s logistics network, helping it compete with Amazon and Walmart’s rural reach while keeping costs in check.

Target may not be talking much about its DEI controversy — or the fallout that followed — but its recent moves suggest a new kind of outreach is underway. Not with rainbow displays or culture-war statements, but with square footage, hiring events, and checkout lanes.

In a moment where trust is fractured and consumer loyalty is fickle, Target isn’t shouting. It’s showing up.