Shares of Target (TGT) - Get Report edged up Wednesday as the retail giant announced it would be boosting its employees' starting pay to $15 an hour as shoppers return to stores with the lifting of coronavirus lockdown restrictions across the country.
Target's stock price rose 0.24% to $119.50 in premarket trading as the retailer unveiled plans for the wage hike, slated to kick in starting July 5. Target has raised its minimum wage from $11 an hour in 2017, when it first announced plans to steadily increase its hourly wage to $15 by 2020.
Target also said it will pay out $200 bonuses to store and distribution center employees for their work during the pandemic. In April, Target paid out bonuses ranging from $250 to $1,500 to the 20,000 "store team leads" who oversee various store departments.
Target's latest round of pay hikes comes on the heels of new numbers pointing to a strong rebound in retail sales across the United States.
U.S. retail sales shot up a record 17.7% in May over April as consumers opened up their wallets after a two-month shutdown of shops and stores as states scrambled to flatten coronavirus infection rates.
The federal government's $3 trillion in rescue money doled out to businesses and households has also provided a major boost, analysts say.
With its pay hike and bonuses, Target said it will have spent an additional $1 billion on compensation and other benefits this year for its rank-and-file employees amid the coronavirus. The additional spending also includes personal protective equipment and paid leave, Target said.