Target just committed $5 billion in capital spending for 2026 — 30-plus new stores, 130 remodels, and hundreds of millions more in store payroll and training. The company opened its 2,000th location in March. It plans 300 more by 2035.
This is not a company that missed the memo on digital. Two-thirds of Target's digital sales are fulfilled through same-day in-store services — drive-up, pickup, delivery from the store. The physical location isn't competing with digital. It's powering it. That's a credit union branch strategy lesson worth more than most conference keynotes on the subject.
The Numbers Behind Target's Bet
Target's March 3 strategic plan lays it out clearly. The $5 billion is an increase of more than $1 billion over the prior year. The new stores are larger-format prototypes — the Fuquay-Varina, NC flagship is 148,000 square feet with a 30% bigger food and beverage department. The remodels aren't cosmetic. They're full-store overhauls designed around a format Target says drives 92% shopper satisfaction.
The payroll investment is the part that should get CU executives' attention. Target is spending hundreds of millions to put more people in stores and train them better. Not fewer. More. At a time when Costco's minimum wage just hit $21 an hour, Target is explicitly competing on the quality of the in-store human interaction — not trying to engineer it out.
Credit Union Branch Strategy Is Going the Other Direction
Credit unions lost 32 branches in Q1 2025 alone — the largest quarterly decline since late 2021. Total branch count sits at 21,984 and has been drifting downward since before the pandemic. The number of federally insured credit unions dropped to 4,287 by year-end 2025, per NCUA.
The prevailing logic is familiar: digital adoption is up, branch traffic is down, real estate is expensive, close the underperformers. And for some locations, that's the right call. But the industry's default posture has become "defend branch spending" rather than "invest in branch value." Those are very different positions.
Target isn't defending its stores. It's attacking with them.
Chase Sees It Too
Target is not alone in this bet. JPMorgan Chase announced 160-plus new branches in 2026, nearly 600 renovations, and 1,100 new hires — across more than 30 states. Chase now operates over 5,000 locations. This is the fifth straight year of net branch growth.
When the country's largest bank and the country's sixth-largest retailer are both increasing physical investment at the same time, the "branches are dying" narrative starts to look less like a trend and more like a story smaller institutions told themselves to justify budget cuts.
What Target Actually Figured Out
The insight from Target isn't "physical is better than digital." It's that physical and digital are the same channel when you design them that way. The store is a fulfillment hub. It's a discovery space. It's a service center. It handles returns, pickups, same-day orders, and in-person shopping in the same building with the same staff.
Credit union branches could do the same thing — if they were designed for it. A branch that handles loan closings, financial planning appointments, digital onboarding support, notary services, and community events is not a legacy cost center. It's a member relationship hub that happens to have a physical address. The problem is that most CU branches are still designed like it's 2005: teller line, loan officer office, drive-through.
The Real Credit Union Branch Strategy Question
The question isn't whether to keep branches open. It's whether the branches you have are earning their square footage.
Target measures every store against a format that drives satisfaction, fulfillment efficiency, and per-visit revenue. Credit unions could apply the same discipline: what does each branch do that a mobile app can't? If the answer is "not much," that's not an argument for closing it. It's an argument for redesigning it so the answer changes.
The institutions getting this right are the ones treating branches as their highest-value member touchpoint — staffed well, designed intentionally, and integrated with digital rather than competing against it. The ones getting it wrong are the ones cutting branches to save money while wondering why member engagement is flat.
Target just bet $5 billion that physical presence, done right, is a growth strategy. Credit unions sitting on 21,984 locations might want to ask whether they're investing in theirs — or just maintaining them until the lease runs out.