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After sales and traffic continued to slide during the holidays, Target Corp. is scaling back big portions of its innovation agenda to double down on its core business.

The Minneapolis-based retailer has killed Goldfish, a secretive e-commerce start-up it green-lighted a year ago, and has shelved a prototype for a robot-infused store of the future that was slated to soon be built, according to four sources familiar with the matter.

Other smaller projects from the innovation team also have been eliminated or reduced in recent weeks.

The cutbacks have left some within the company unsettled about Target's long-term plans for growth and innovation, especially as more consumers are flocking to The online behemoth is known for innovation, including its one-hour Prime Now delivery service and a new store concept without registers that it recently opened in Seattle.

Target declined to discuss Goldfish, the store of the future, or other projects that have been cut since the company hasn't publicly spoken about those initiatives in the past. But the retailer did acknowledge a shift in its strategic focus.

"At Target, we regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources," Dustee Jenkins, Target's senior vice president of communications, said in a statement. "We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities."

Target still sees "tremendous opportunity" for innovation to fuel growth in digital, technology, supply chain and merchandising, Jenkins said. "Target remains absolutely committed to pursuing what's next," she said.

Many of the initiatives being halted were launched during the watch of CEO Brian Cornell, but at a time when the company was seeing sales growth. In the last nine months, store traffic and sales have been on the decline with grocery and electronics being particular soft spots.

The company is on track to report negative sales for the fiscal year, a far cry from the company's initial goal of growing sales as much as 2.5 percent. Its stock is down about 13 percent in the last year.

The decisions to cut projects on the innovations team started in the last couple of weeks after Target issued a pre-earnings announcement warning that holiday sales and profits were weaker than anticipated. Target said that comparable sales in November and December dropped 1.3 percent.

As the business has struggled, Target has seen executive turnover. Most recently, Jamil Ghani, Target's senior vice president of strategy and innovation, left to take a job at Amazon.

Brian Yarbrough, an analyst with Edward Jones, said it's a tough environment for retailers right now as they work to improve their websites and other digital capabilities while not losing focus on their stores.

"I do think they have to innovate," he said. "But their bread and butter is still brick-and-mortar retail stores. They have to get that right and find ways to drive more traffic to the stores."

A lot of these projects with robotics and start-ups sound great, he said, but they are difficult to implement and roll out chainwide.

"You're not going to out-Amazon Amazon," Yarbrough said. Amazon "has so much capital to spend, and Wall Street rewards them for continuing to spend. Retailers are in a different position."

Fundamentals first

Carol Spieckerman, a retail consultant, agreed that Target needs to focus on fixing the fundamentals first.

"Target simply can't do everything at once," she said.

The store of the future was a concept Target was exploring to envision how its stores should look and feel several years out as online shopping continues to disrupt the landscape. It went beyond store remodels Target is currently rolling out — with enhanced displays and dedicated online pickup areas.

Casey Carl, Target's chief innovation and strategy officer, first unveiled the project at the company's 2015 fall national meeting for employees. He said it would have robots and would blend physical and digital capabilities and would be a place for inspiration as well as instant gratification.

His team worked on the idea and had been building it out in a warehouse. He said in 2015 that Target was scouting locations for the concept store and hoped to open it within the next 18 months.

Target hasn't said much about it since then, but the work on it has been quietly underway.

Recently, Target had picked out an existing store in Silicon Valley to place the experimental store and was in the process of closing that store to start renovations, according to two sources familiar with the matter.

Another source said the prototype had a lot of automation built into it. It was to be a showroom of sorts where customers could explore products on the sales floor, but the rest of the inventory would be held in the back and customers could pick up the items as they were leaving. Plans also called for a community space where classes could be held for groups such as new moms.

As for Goldfish, not many people inside of Target knew what it was actually about since it was purposely kept secretive for competitive reasons.

"Are you interested in being part of a fast-paced team working on revolutionizing the way people shop?" said a job posting from December for Goldfish. "Do you want to invent, develop and deliver modern technology to transform online shopping experiences?"

The project was the brainchild of West Stringfellow, one of three entrepreneurs-in-residence that Target brought on board in 2015 to help the retailer think outside the box and to identify new opportunities for growth and innovation. He was later hired on at Target to be its vice president of internal innovation.

Target gave him the go-ahead about a year ago to pursue Goldfish as a start-up within Target and to hire about 20 engineers and product managers for it. The team worked out of Target's Silicon Valley office in Sunnyvale as well as in Seattle and Minneapolis.

Stringfellow moved to California from Minneapolis last year to work on the project. He did not respond to a request for comment.

It remains to be seen what other projects may still be on the chopping block. But one program that appears safe for now is the Techstars accelerator program that Stringfellow spurred Target to bring into the company. The boot camp for retail-focused start-ups is now accepting applications for its second class set to start this summer.

In the last two years, Target has already cut about $2 billion in expenses, including thousands of corporate layoffs. Executives have said they plan to continue to find additional opportunities for savings.

Cornell and his top executives will lay out their plan for growth at an investors meeting in New York on Feb. 28.

So far, he has focused his efforts around launching new private-label brands such as the well-received Cat & Jack kids apparel line, opening smaller-format stores in cities, adding more healthy items to its grocery aisles and making sure shelves are better stocked.

Kavita Kumar • 612-673-4113