Target, Walmart, Home Depot Watched for Inventory and Omnichannel Trends

Both Target and Walmart installed new CEOs on February 1, with Target's Michael Fiddelke and Walmart's John Furner each stepping into their roles as longtime company insiders. That leadership timing has drawn fund manager Edward Merriman's attention. Merriman has identified Target as a key stock to watch alongside Walmart and Home Depot, with inventory management, promotional strategy, and omnichannel execution serving as the primary lenses through which he reads broader consumer trends.

The framing matters for team members on the floor. How efficiently stock moves through Target's backrooms and fulfillment centers, and how cleanly the store-to-digital handoff operates, are now signals that investors like Merriman use to gauge the health of the American consumer overall.

Both retailers have contended with the same economic challenges: U.S. consumers are still spending, but buying selectively, as inflation and tariffs fuel higher prices for groceries and other essentials, causing some shoppers to think twice about discretionary purchases. Shares of Target have tumbled roughly 40% over the past five years and dropped 10% over the past year, a trajectory that puts additional pressure on Fiddelke to demonstrate traction on the operational metrics Merriman and other investors are monitoring.

At Target's financial community meeting, Fiddelke laid out plans to return the discounter to healthy growth through four priorities: leading with merchandising authority, elevating the guest experience, accelerating technology, and strengthening team and communities. Plans include spending an incremental $1 billion operating investment "to deliver a more consistent, elevated experience for guests," covering more in-store changes than any year in the last decade.

Omnichannel execution sits at the center of that investment case. Target has reported that its store-as-hub model reduced average fulfillment costs by up to 40% compared with ship-from-distribution-center methods. Eighty percent of online orders are fulfilled within one day via same-day services, and in September 2025, Target announced expansion of next-day delivery to 35 U.S. metro areas, with plans to add 20 more markets in 2026. Those numbers represent real operational stakes for every team member handling Drive Up, Order Pickup, and ship-from-store on any given shift.

The competitive gap with Walmart, however, remains significant. "Walmart has pursued a much more aggressive digital agenda than Target between their omnichannel and their automation and their marketplace," one analyst noted, adding that Target needs to determine how it wants to compete. Walmart's global e-commerce surged 24% in its most recent quarter, reaching record penetration of U.S. sales and validating the company's massive investments in digital infrastructure, online grocery, and pickup and delivery capabilities.

Beyond the two big-box rivals, Merriman's watch list also accounts for a structural shift at the category level: emerging digital brands are capturing share even in difficult consumer markets. Consumer spending is showing signs of slowing amid market share losses to key competitors, and Target will need to do a better job of providing value to the financially stressed consumer while better differentiating its discretionary products to recapture higher-spending shoppers.

Target's capital investment will be increased by more than $1 billion in 2026 to approximately $5 billion to support new stores and ongoing remodels, technology, and supply chain investments. Fiddelke, who officially stepped into the CEO role on February 1 succeeding Brian Cornell, has framed 2025 as a year of cleanup and 2026 as centered on positioning the company for profitable growth, with a focus on merchandising authority, an elevated shopping experience, and advancing technology. Whether those investments translate into the kind of omnichannel and inventory performance Merriman is watching for will become clearer as Target's quarterly results accumulate through the year.