To give it more quick-delivery capability, Target is investing $100 million to expand its supply chain sortation network to more than 15 facilities by the end of 2026.
Target currently has nine sortation centers in Minnesota, Texas, Colorado, Illinois, Georgia and Pennsylvania, with the three most recently opened facilities in the greater Chicago and Denver metro areas. The $100 million investment will fund a half dozen additional facilities, Target noted.
The sortation centers and related operations demonstrate the transformative power of the company’s stores-as-hubs strategy, which leverages its store network as a launchpad for online orders, Target maintained. Sortation centers are an extension of the store-level operations that ensure faster delivery, saving shipping costs and fueling long-term growth.
“Now more than ever, our guests rely on us to deliver their everyday essentials and Target favorites when they want and need them most,” says Gretchen McCarthy, Target’s chief global supply chain and logistics officer, in announcing the investment. “Through our sortation centers and Target Last Mile Delivery capabilities, we’re able to move faster and with more precision while controlling costs and expanding our network capacity.”
Target piloted the sortation center concept in Minneapolis three years ago, where the facility processed online orders efficiently and quickly for delivery to local neighborhoods via a third-party carrier or Shipt delivery route, depending on the lowest-cost carrier option. Sortation centers delivered 26 million packages to Target customers in 2022, the company pointed out.
