Target is heading to small towns across America. They’ve been waiting

The people of Southern Pines and other communities are finally getting their moment — some have been waiting for decades — as Target brings full-size stores to new areas where it hasn’t competed in the past. Target’s list of upcoming store openings on its website — which doesn’t specify when each store will open — includes a range of towns quite far from dense areas, from Chubbuck, Idaho, to Indian Land, South Carolina. For some, it’s their first Target store.

To be sure, Target is still expanding in big metropolitan areas. Some of the upcoming store openings also include new locations in up-and-coming suburbs of major cities like Dallas, Orlando and Phoenix.

A Target spokesperson declined to provide an executive for an interview to shed further light on the company’s strategy. But, just based on the publicly available list of store openings, it’s a bit of a shift in strategy for Target, at least compared to 2016 to 2021, when it touted the addition of small-format stores in big cities like Chicago, Los Angeles, New York and Washington D.C.

Almost all of Target’s planned stores are set to surpass 100,000 square feet, aiding its “stores-as-hubs” strategy. Since 2017, the company has been thinking of its stores as delivery hubs for online orders, and stores now fulfill the vast majority of Target’s online purchases. That relies on having enough space to receive, store and move inventory close to where customers live.

Just last year, Target said it expected to open more than 300 new, mostly full-size stores over the next decade. It opened 23 stores in 2024 and plans to open about 20 in 2025, according to the company’s 2024 annual report.

The big-box retailer already has a wide reach. “Three out of four Americans live within 10 miles of a Target store,” Target chief operating officer Michael Fiddelke said on the company’s last earnings call this March. “We call that a good base on which to build.” Still, it’s a smaller base than that of its biggest competitor Walmart, which has said about 90% of the U.S. population lives within 10 miles of a Walmart or Sam’s Club.

Now is also a critical time for Target to win over new customers as it attempts to recapture its “Tar-zhay” magic. Its sales have dropped 3% year over year in the first quarter, its foot traffic has fallen, and some of its customers started boycotting the chain for pulling back diversity, equity and inclusion practices. In turn, a charm offensive in small towns could help.

In the age where you can order nearly everything from Amazon, many of the mayors and local business owners interviewed by Modern Retail emphasized that they feel like their residents see the arrival of Target as a big, red status symbol. Many, like Clement, recall stories of people in their communities asking repeatedly when they would be getting a Target.

After all, online orders in rural areas and third-tier cities often don’t arrive as quickly compared to major metropolitan areas. (For its part, Amazon announced in April that it would invest $4 billion in its rural delivery network). Additionally, many of the people interviewed for this article said residents were already feeling the squeeze of limited retail options as grocery stores or other big-box chains like JCPenney and Best Buy have closed. And perhaps most importantly, the arrival of a Target could help bring other national retailers and popular restaurant chains to town.

On the local level, Target’s shift has big implications. City officials and business leaders in three small towns where Target recently opened stores for the first time — from North Carolina to California — described how Target worked its way into their communities, bringing new jobs and new growth, but also new concerns.

Southern Pines, North Carolina (2023 population: 16,728)

Long considered a hotbed of retirees and golf retreats, Southern Pines is also now a destination for military families and hospital workers. “People are just in awe of what we have to offer,” said real estate agent and former mayor Carol Haney, adding that residents gather around choral concerts, horse shows and golf, evoking images of 20th-century American culture. “I always said it’s like Norman Rockwell here.”

Haney fields questions from families moving to the region to work at local hospitals or the U.S. Army base Fort Bragg about 30 miles east, which was previously known as Fort Liberty but renamed by the Trump administration. She was often the one to break the bad news: The town was more than 30 miles from the nearest Target, in Fayetteville, North Carolina.

“If you’re moving here, one of the questions if you’re a young family is, ‘Where’s the nearest Target?'” Haney said. For forever, she would have to say there isn’t one.

That finally changed last October, when Target finally opened in the Morganton Park South shopping center, which opened earlier that year and also attracted Dick’s Sporting Goods, HomeGoods and Five Below. The location had been set aside for big-box retail as far back as the mid-‘90s, according to town manager Reagan Parsons.

“We’ve seen very minimal big-box retail throughout the decades here in southern Moore County,” Parsons said, adding that the county has had a Walmart and a Lowe’s, but not much more big-box retail.

For years, various development groups had tried to get Target to town, according to Parsons. He said he remembers being asked in community meetings as far back as 2005 when the retailer would be coming, though “it was not the kind of thing that we chased.” The shopping center’s developer, Cincinnati-based Midland Atlantic, had previously worked with Target and finally convinced the Minneapolis retailer.

At 147,000 square feet, the store ended up being larger than originally planned with more warehousing for last-mile delivery, Parsons said, fitting with the retailer’s increased focus on using stores to fulfill online orders. Amazon also has plans to build a small last-mile distribution center in the Southern Pines Corporate Park less than four miles away.

“As North Carolina is growing and expanding outward from some of the city centers, we’re starting to see quite a bit of interest in the area in those types of activities,” Parsons said.

There were concerns that Target would hurt local businesses. In 2019, Nashville singer and songwriter Becca Rae — who previously lived in Southern Pines — even wrote a song about how the town didn’t need a Target, celebrating the local small-business community. Others believe the store drives traffic to the small businesses downtown.

“This discussion around Target is very much a part of being in a small town that is growing and changing,” Clement said. “Our role [as public officials] is to be a steward of our town and protect what is special and people love about it, … while also creating economic opportunity for the people who are here.”

Kimberly Daniels Taws, manager of The Country Bookshop in downtown Southern Pines, said the bookstore’s number of transactions has fallen since Target opened, which she blames on the retailer. However, revenue is up. She attributes that to other initiatives like events the store has leaned on to build awareness and sales, knowing people come to the bookstore for social interactions that one wouldn’t get at a big-box store.

“Target’s not going to go pop up at a brewery or at the cider house,” Taws said. “It’s an opportunity to get innovative, because we have these community connections that Target doesn’t have.”

Quincy, Illinois (2023 population: 38,803)

The small town of Quincy, Illinois, wasn’t as lucky as Southern Pines to already have a Target 30 miles away. For the residents of Quincy, which is located more than a two-hour drive northwest of St. Louis, the closest Target was over an hour away in West Burlington, Iowa.

Still, a quarter of a million people live within 75 miles of Quincy and rely on the city for medical care or to work in medical, retail, education, agriculture or manufacturing, according to former Mayor Mike Troup, whose term ended May 4. Some of the major employers include Blessing Hospital; Titan International, which makes Titan- and Goodyear-branded tires; and truck utility-bed manufacturer Knapheide.

“I think that’s what made Quincy attractive to several of the national retailers,” Troup said.

Target finally opened a 104,000-square-foot store in Quincy in 2023, a scene change from before the pandemic, when several retailers left the area as they were closing or relocating underperforming stores, including JCPenney in 2015 and Sears in 2018. Best Buy in 2017 decided not to renew its lease.

Over the past year, more retailers have opened up in the small town, including Ollie’s Bargain Outlet, Dunham’s Sports and R.P. Lumber. Troup said other national retailers would call the planning and development office to ask whether Target was open yet. When it was, those retailers would say, “Well, if that’s the case, we’d like to come and take a look at different available sites,” according to him.

Tory Kaufmann, president of Marx Commercial Development Co., which owns shopping centers in Quincy, said in addition to other retail tenants, restaurants, especially, go where Target goes. “Without Target going there, there’s no [Raising] Cane’s,” he said. Kaufmann believes retailers are starting to see the city and developers’ vision that the opportunity is not just in the city of Quincy itself, but also the surrounding population of people who will drive in.

Financing constraints due to elevated interest rates, as well as zoning and infrastructure restrictions in some jurisdictions, have limited the construction of new retail space, leading to a tight or competitive leasing environment. Walter Wahlfeldt, a Chicago-based managing director of retail corporate services and Midwest retail lead for real estate brokerage JLL, said because of the lack of development in major markets, retailers overall have been identifying smaller markets they normally wouldn’t have pursued. That especially escalated after the pandemic when people moved back to small cities and working from home became more common, he said.

“There are markets that, with certain retailers, we had just written off” for being too small, Wahlfeldt said. “But today, maybe that’s different; you do less revenue, but the costs are lower and you feel a little bit different about the demographic now.”

South Lake Tahoe, California (2023 population: 21,079)

In exchange for having ski resorts nearby and views of the Sierra Nevada mountains, residents of the small mountain town South Lake Tahoe, California, don’t have too many shopping options.

The city’s Kmart closed in August 2021, leaving a big-box void to fill in the area. A Raley’s grocery store closed in 2023 after the company was unable to come to terms with its landlord, and a snow-induced roof collapse caused the store to close for good three months early that March, according to the Reno Gazette-Journal. Some lamented the loss. “When we stay at our timeshare, we shop here (walking distance!),” Facebook user Michelle Bush said in a comment in 2023. “Now what?”

Target opened up in the former Raley’s this April. Unlike many of the new-construction stores, the new location is only 64,000 square feet and has a brown, wood-paneled exterior inherited from Raley’s that looks like ski lodge.

The big-box retailer represented a big change for the local retail ecosystem, according to Tamara Wallace, mayor of South Lake Tahoe. She would often shop on Amazon instead of in-person before Target opened, but even then, she said the deliveries would typically take a few days in such a remote location.

Wallace said she sent an email to Target officials asking for a store in 2020 but never heard anything back. She said that while many in mountain towns are opposed to having a lot of chains and big-box stores, and environmental regulations can make new development challenging, the town had a need for more general shopping options. For buying things like printer paper, heating pads or housewares, she said the best in-person options may have been Ross Dress for Less or T.J. Maxx, but they wouldn’t always carry those items.

“Everybody I know was asking for a Target,” she said. “We had gone several years without good options in that line of retail, so I think there was less opposition to it because of that.”

Clement, for her part, said that in Southern Pines, people who are shopping at Target were going to do it regardless, either in another town or online. She believes big-box stores and locally owned businesses can complement each other.

“Now, we have people who are coming into Southern Pines, specifically from smaller towns around us, to go shopping,” she said. “They’re still going to hopefully spend some time at some of the other shops, and maybe find themselves downtown and realize that this is the kind of place that they want to come [to] and actually spend more time.”