Target 2010 Annual Report Download - page 28

If we do not effectively manage our large and growing workforce, our results of operations could be
adversely affected.
With approximately 355,000 team members, our workforce costs represent our largest operating expense, and
our business is dependent on our ability to attract, train and retain a growing number of qualified team members.
Many of those team members are in entry-level or part-time positions with historically high turnover rates. Our ability
to meet our labor needs while controlling our costs is subject to external factors such as unemployment levels,
prevailing wage rates, health care and other benefit costs and changing demographics. If we are unable to attract
and retain adequate numbers of qualified team members, our operations, guest service levels and support
functions could suffer. Those factors, together with increasing wage and benefit costs, could adversely affect our
results of operations.
Lack of availability of suitable locations in which to build new stores could slow our growth, and difficulty in
executing plans for new stores, expansions and remodels could increase our costs and capital
requirements.
Our future growth is dependent, in part, on our ability to build new stores and expand and remodel existing
stores in a manner that achieves appropriate returns on our capital investment. We compete with other retailers and
businesses for suitable locations for our stores. In addition, for many sites we are dependent on a third party
developer’s ability to acquire land, obtain financing and secure the necessary zoning changes and permits for a
larger project, of which our store may be one component. Turmoil in the financial markets may make it difficult for
third party developers to obtain financing for new projects. Local land use and other regulations applicable to the
types of stores we desire to construct may affect our ability to find suitable locations and also influence the cost of
constructing, expanding and remodeling our stores. A significant portion of our expected new store sites are
located in fully developed markets, which is generally a more time-consuming and expensive undertaking than
expansion into undeveloped suburban and ex-urban markets.
Interruptions with our vendors and within our supply chain could adversely affect our results.
We are dependent on our vendors to supply merchandise in a timely and efficient manner. If a vendor fails to
deliver on its commitments, whether due to financial difficulties or other reasons, we could experience merchandise
out-of-stocks that could lead to lost sales. In addition, a large portion of our merchandise is sourced, directly or
indirectly, from outside the United States, with China as our single largest source. Political or financial instability,
trade restrictions, increased tariffs, currency exchange rates, the outbreak of pandemics, labor unrest, transport
capacity and costs, port security or other events that could slow port activities and affect foreign trade are beyond
our control and could disrupt our supply of merchandise and/or adversely affect our results of operations.
Failure to address product safety concerns could adversely affect our sales and results of operations.
If our merchandise offerings, including food, drug and children’s products, do not meet applicable safety
standards or our guests’ expectations regarding safety, we could experience lost sales, experience increased costs
and be exposed to legal and reputational risk. All of our vendors must comply with applicable product safety laws,
and we are dependent on them to ensure that the products we buy comply with all safety standards. Events that
give rise to actual, potential or perceived product safety concerns, including food or drug contamination, could
expose us to government enforcement action or private litigation and result in costly product recalls and other
liabilities. In addition, negative guest perceptions regarding the safety of the products we sell could cause our
guests to seek alternative sources for their needs, resulting in lost sales. In those circumstances, it may be difficult
and costly for us to regain the confidence of our guests.
6