Target is adding stores and upgrading existing locations across a network where physical stores already fulfill more than 95% of sales. The expansion increases the number of inventory points Target must coordinate as digital fulfillment grows and puts greater weight on inventory positioning, middle-mile planning and execution consistency.
In Brief
- Target opened 24 full-size stores during the first half of 2026 while advancing more than 100 remodels, adding and upgrading nodes in a network where stores fulfill more than 95% of sales.
- Same-day and next-day fulfillment units increased nearly 30% in the second quarter, increasing the importance of placing inventory close to demand and maintaining reliable availability.
- Target is using prepositioned inventory, dedicated transportation capacity and a digital twin of its middle-mile network to improve how product moves between facilities and stores.
Stores Carry More of the Fulfillment Network
Target’s store expansion is adding physical capacity to a network in which stores already play a central role in fulfillment.
The retailer opened 17 full-size stores during the second quarter, bringing first-half openings to 24, while more than 100 full-store remodels were underway. Target expects to complete approximately 130 remodels during the year.
Those locations serve more than walk-in demand. Target says its stores function as fulfillment hubs for more than 95% of sales, bringing inventory closer to customers and supporting faster, more reliable and more cost-effective fulfillment.
That role is becoming more important as digital demand grows. Digital comparable sales increased 8.7% in the second quarter, led by same-day delivery growth of more than 25%. Target also fulfilled nearly 30% more same-day and next-day units than it did a year earlier.
The 24 openings should not be interpreted as stores built specifically to support that growth. Target has not disclosed how much digital volume the new locations handle or their individual fulfillment economics.
Their supply-chain significance comes from joining an existing store-led fulfillment system. Every additional location becomes another point at which Target can hold inventory and serve customers, but also another node that has to be coordinated with distribution facilities, transportation flows and the rest of the store network.
For supply-chain leaders, that makes store growth a network decision as well as a property decision. Adding a node creates value only when inventory can be positioned and replenished effectively enough for the location to support both local store demand and the fulfillment model surrounding it.
Inventory Positioning Determines the Value of Proximity
A store can only provide a proximity advantage when the required inventory is available there.
Target has been improving that part of the system. Availability on its most frequently purchased products reached its strongest level in recent years during the second quarter, while overall inventory reliability reached multiyear highs.
Those improvements occurred during an unusually heavy period of change.
Target completed its largest quarterly volume of in-store transitions in more than a decade. The work included changes affecting nearly half of its center-store grocery assortment and approximately three-quarters of decorative accessories, alongside store openings, remodels and preparations for a Beauty rollout across more than 600 locations.
That volume of change puts additional pressure on inventory planning. New assortments have to enter stores as existing products leave, while replenishment continues and the same inventory base supports physical and digital demand.
Target says closer coordination among merchandising, supply chain and store operations, supported by improvements in planning tools, helped maintain execution through those transitions.
Back-to-School provides a more specific example of how the company is positioning inventory around demand.
Target prepositioned inventory and dedicated trailer capacity to key seasonal assortments, with the aim of improving availability in its highest-volume stores. Management also highlighted the difficulty of a season in which schools peak at different times, increasing the importance of having inventory in the correct location when local demand arrives.
The principle becomes increasingly important in a store-led fulfillment network. Physical proximity reduces the potential distance between product and customer, but inventory allocation determines whether that proximity can actually be used.
A nearby store without the required item cannot fulfill the promise created by the network.
Target Is Testing Inventory Flows Before Deployment
Target is also building greater visibility into how inventory decisions travel through the network.
The company is investing in Proxima, a digital twin of its middle-mile inventory positioning system. The technology allows teams to test and iterate inventory-flow plans before putting them into operation.
Target says Proxima can show how proposed inventory processes between buildings and stores could affect other parts of the network, allowing teams to understand downstream effects and make decisions with greater confidence.
That capability becomes more useful as the number of nodes, fulfillment routes and inventory decisions increases.
A change intended to improve one location can affect product availability elsewhere. Redirecting inventory toward a high-volume store, changing replenishment flows or adjusting how product moves between facilities and stores can alter capacity requirements at other points in the network.
Testing those decisions before implementation gives Target a way to examine the network effect rather than assessing each inventory movement independently.
The technology also connects directly with the company’s broader supply-chain objective. Target said Chief Supply Chain Officer Jeff England is focused on ensuring teams work together to get the right product to the right place at the right time, while identifying opportunities to simplify processes and improve efficiency and productivity.
Target has not disclosed quantified savings from Proxima or how extensively it is currently used across inventory decisions. Its importance at this stage lies in the problem it addresses: coordinating inventory across an increasingly interconnected network of facilities and stores.
Network Growth Increases the Execution Load
The expansion also raises the amount of change Target’s network must absorb.
Chief Executive Michael Fiddelke described a tension between the urgency to make improvements and the company’s ability to execute them effectively across approximately 2,000 stores and a workforce of 400,000. Target has initiatives extending into 2027 and 2028, but management says they have to be sequenced and prioritized at a pace the organization can execute well.
That constraint applies directly to the fulfillment network.
New stores introduce additional inventory positions and replenishment requirements. Remodels alter existing locations while they remain part of the fulfillment system. Assortment transitions change what inventory needs to flow through the network. Faster digital fulfillment increases the importance of accurate availability at store level.
These changes compete for planning capacity, transportation, inventory and store execution.
Target is committing more capital to that network. First-half capital expenditure reached approximately $2.4 billion, nearly 30% above the prior year, reflecting additional investment in new stores, full-store remodels, supply-chain capabilities and technology. Full-year capital expenditure is expected to reach approximately $5 billion.
The return cannot be attributed to fulfillment alone because those investments support several parts of Target’s strategy. Nor has the company disclosed location-level fulfillment costs or the productivity contribution of its new stores.
What can be measured is whether the wider network continues to improve availability, speed and reliability as additional capacity and change are introduced.
More Nodes Require Better Inventory Decisions
Target’s store expansion increases the reach of a fulfillment system already built heavily around physical locations. But adding stores does not automatically improve fulfillment.
The value comes from placing the right inventory inside those nodes, replenishing it at the right time and coordinating decisions across stores and upstream facilities without weakening availability elsewhere.
Target’s investment in middle-mile modeling, inventory reliability and coordinated seasonal planning shows where that work is concentrating. As digital volumes increase and the store base expands, the quality of inventory decisions will matter as much as the number of fulfillment points available.
For supply-chain leaders, that is the more useful measure of Target’s expansion: not how many nodes the network adds, but how effectively the company can use those nodes to position inventory closer to demand without adding unnecessary stock, complexity or execution pressure.
