Target and Ulta Beauty have decided to end their five-year-old partnership.
“Since launching in 2021, Ulta Beauty at Target has expanded access to prestige beauty and offered beauty enthusiasts the benefit of linking their Ulta Beauty Rewards and Target Circle accounts for added convenience and value. Guests with linked rewards accounts will continue to earn Ulta Beauty Rewards on eligible Ulta Beauty at Target purchases until August 2026,” the two companies shared in a press release.
Come August, however, the deal will end, and the Ulta Beauty stores inside Target locations will close forever.
“Staffing needs, loyalty program synergies, shrink, and [return on invested capital] were likely key considerations,” TD Cowen analysts said in a note shared with Retail Dive, which also referenced “conscious uncoupling.”
Target tried to frame the move as a positive.
“Trends and expectations can change rapidly across virtually every sector of retail, but this is particularly true in beauty…. Over time, in light of shifting consumer trends, we believe we have a compelling opportunity to repurpose this space to meet those changing needs,” Target’s Chief Commercial Officer Richard Gomez shared during the retailer’s second-quarter earnings call.
Walmart sees beauty as an opportunity
While Target has not dropped beauty, ending its partnership with Ulta Beauty may open a door for Walmart to expand its offerings in the space. That’s something the retail giant has been pursuing in multiple ways, including a six-week “Beauty Event” last year, and some in-store changes.
“We’re introducing Beauty Bars in 40 select stores — a pilot program where customers can explore new products, talk to beauty experts, and test samples. We’re also spotlighting trend-forward brands online with elevated shopping experiences and editorial storytelling,” Walmart shared in a press release.
Now, Walmart has decided to invest in adding a new beauty-related position to about 10% of its over-4,500 U.S. stores.
“Following a 22-store test, Walmart plans to expand a new beauty expert store associate role to 425 stores across the U.S. by the end of the year,” the company told Retail Dive.
Pilot testing of the new position began in September 2025 in Northwest Arkansas and expanded to Dallas-area stores in January.
More Walmart
- Walmart’s new partner brings iconic brand to the retail giant
- Walmart makes a change to be more like Costco
- Amazon and Walmart can’t stop a $12 billion theft problem
“The store ‘Beauty Experts’ serve as dedicated associates to the beauty category instead of having a shared-responsibility store position. They can earn between $14 and $35 per hour based on location,” Retail Dive reported.
Walmart has repeatedly described its beauty strategy as a “transformation,” emphasizing a shift toward becoming a full-service beauty destination rather than a traditional mass retailer. The company is expanding its assortment to include both value and premium brands, while investing in new in-store experiences and digital tools to compete more directly with specialty beauty chains.
Shutterstock
Walmart’s beauty moves come at an interesting time
While the overall economy has been struggling and many Americans have cut discretionary spending, this might be the right time for Walmart to make a push into beauty, according to Circana Beauty Advisor Larissa Jensen.
“When economic sentiment gets shaky, consumers turn to beauty products for an emotional lift. Sales performance results reinforce beauty’s resiliency and unfaltering position as an indispensable category. As the prestige and mass industry lines blend, a clear picture of the total beauty market becomes particularly important for brands and retailers,” she said.
There are, however, risks in making a large beauty play now.
“For years, a seemingly insatiable appetite for newness in beauty fueled robust volume and even greater pricing growth, with the sector growing 7% annually from 2022 to 2024. Now, geopolitical and economic uncertainty, market saturation, and evolving consumer preferences threaten that progress, requiring industry leaders to develop a new growth strategy,” according to McKinsey’s State of Beauty report.
Still, despite the risks, McKinsey sees a growing market.
“Looking ahead, we expect the global beauty market to grow 5% annually through 2030. In this year’s Beauty Executive Survey, 75% of executives say they are doubling down on sales growth, and they expect growth to be less price-driven,” the report showed.
Walmart, as a low-priced retailer, is well-positioned for where the market sits now.
“They also anticipate consumer scrutiny of perceived value to be the biggest theme shaping the industry, with 54% identifying uncertain consumer appetite or restricted spending as the greatest risk to the industry’s future growth,” according to McKinsey.
Related: McDonald’s shares burger menu protein hacks as beef prices rise
