Ulrich will step down as CEO on May 1, soon after he turns 65. But Ulrich will remain Target's chairman through January 2009.
Succeeding Ulrich as CEO will be veteran Target executive Gregg Steinhafel.
The long-expected handoff comes as the country's second-largest retailer has seen its sales sag as the economy sputters. But industry observers dismiss any suggestion Ulrich's departure has anything to do with slack sales.
"The corporation, I think, is in terrific shape," says Akshay Rao, a marketing professor at the University of Minnesota.
“Lots of people tried [to compete with Wal-Mart], and they're all dead. ... the only one who did it was Target.”Retail analyst Howard Davidowitz
Rao says Ulrich can't make Target immune to economic downturns. But he says Ulrich has done good job leading the company through harder times.
"Given conditions in the world economy, the price of oil, the state of the U.S. economy, unemployment and so forth, Target as a brand has done extraordinarily well," says Rao.
The company didn't make either Steinhafel or Ulrich available for interviews. Steinhafel issued a prepared statement, though.
He praised Ulrich for helping define the Target brand and establishing the company as a consistent money maker. Steinhafel said he was fortunate to have had the opportunity to learn from Ulrich.
Ulrich began his career as a merchandising trainee in 1967 at Dayton's, a former division of Target. He climbed the corporate ladder until he rose to become CEO and chairman in 1994.
"He is a retailer's retailer," says retailing consultant Kurt Barnard.
Barnard says Ulrich managed to find a formula for success in an era when many retailers failed and closed their doors.
"Not only has he established a model, he has done extremely well executing that model," says Barnard.
Many retailers crumbled before Wal-Mart. But not Target. And retail analyst Howard Davidowitz says Ulrich deserves great credit for Target's success in battling Wal-Mart.
"Lots of people tried, and they're all dead," says Davidowitz. "The only one who was able to come up with a different kind of discounter, a more upscale discounter, a more fashion-forward discounter, a more interesting discounter, a discounter that attracted a more affluent clientele -- the only one who did it was Target. This is a tremendous achievement."
Davidowtiz says Ulrich will be remembered for building one of the greatest retail companies in the nation's history. The company has nearly 1,600 stores in 47 states. And Target's annual sales top $50 billion.
Other analysts note Ulrich's record was not perfect, of course. For example, he's been faulted for missing chances to give Target more stores on the East Coast.
Ulrich's successor, Gregg Steinhafel, is 52 years old. He's known as a frequent visitor to Target stores, and for a sharp eye for the style factor in the goods they offer. He has been with the retailer since 1979.
Last year, Steinhafel joined the company's board. That was seen as a signal he was on the way to the CEO post. Davidowitz says Steinhafel is well prepared for the top job at Target.
Gregg Steinhafel has earned his spurs every step of the way. That's why he's going into the position he's in," says Davidowitz. "He's earned what he's got. He's performed at every level."
Steinhafel has focused on making Target's supply chain more efficient, and keeping items in stock.
Steinhafel prodded Target to get into groceries with its SuperTarget stores. Some saw that as risky, since groceries bring more customers into stores but carry lower profit margins. Target and its share price have stumbled in recent months. December sales are likely to fall well short of the level needed to grow fourth-quarter profits above last year's.
Target has said sales in established stores for December and the first week of January may end up being essentially flat, compared with the same period a year ago.