Target Corp (TGT.N) next month will raise the minimum wage for all of its workers to $9 an hour, matching moves made by rivals including Wal-Mart Stores Inc (WMT.N) and TJX Cos (TJX.N), a source familiar with the matter said.
The move comes in the face of pressure from labor groups and allies calling for a "living wage" at retailers and fast-food companies across the country, as well as the lowest unemployment rate in more than six years.
Target shares fell 1 percent in extended trade. The company has said it does not disclose wage levels.
The clearest sign of the changing labor landscape came last month when Wal-Mart said it would move to the $9 minimum in April. Next year, employees with some six months training would be paid a minimum of $10 an hour.
A week after Wal-Mart's announcement, T.J. Maxx and Marshalls owner TJX said it would match the $9 minimum in June.
Target Chief Financial Officer John Mulligan told analysts earlier this month that it was "not reasonable" to think in terms of a national minimum rate. Paying only $9 an hour in New York City or the oil-crazed economy of North Dakota would not attract any workers, he said.
"Fixating on some single number to us, on an average number is unimportant. It's about being competitive locally at a store level within a marketplace. That is important, and we're going to be competitive," he said.
But pressure rose on Target, which is competing for employees with Wal-Mart. Women's advocacy group UltraViolet, for instance, recently ran a Web ad campaign that targeted devices located near three Target stores.
Banner ads read, "Did you know there's a Walmart near you that pays higher minimum wage than Target?"
Meanwhile, the U.S. unemployment rate has fallen to 5.5 percent.
The Target wage raise, which was reported earlier by Dow Jones, will affect all 1,800 U.S. stores. The company already paid employees more than the federal minimum wage of $7.25 an hour, and it was not clear how many employees' checks would be affected.
(Writing by Dan Burns and Peter Henderson; Editing by Chris Reese and Jonathan Oatis)