(Reuters) -Target needs a hard reset on strategy, Wall Street believes. And new CEO Michael Fiddelke may not be the person to do it.

The retailer has missed the performance mark for many quarters, with sales flagging after a pandemic high, as it failed to deliver what shoppers currently want: a wide variety of good-quality groceries and daily essentials at low prices, delivered to their homes quickly. 

Fiddelke, a company veteran of more than two decades who recently led an effort to remove complexity and expand the use of technology at Target, laid out his priorities on Wednesday, without wowing analysts on an earnings call.

"We must reestablish our merchandising authority in a way that is distinctly Target," he said. "We want guests to find a sense of joy from every trip to Target and we must do that more consistently and frequently. And third, we must more fully use technology to improve our speed, guest experience and efficiency throughout the business."

He did not describe what he meant by a 'distinctly Target' brand, beyond saying the company needed to reclaim its leadership in product assortment, style and design.

Several analysts said the company had lost its way.

"Target seems to be experiencing something of an identity crisis," said Jamie Meyers, senior analyst at Laffer Tengler Investments, which holds shares of rivals Walmart and e-commerce company Amazon.com, but not Target.

"It's unclear what they represent as they're not an office retailer, a low-budget chain, a dollar store or a direct competitor to Walmart or Amazon," said Meyers, who believes Target needs someone from the outside as CEO to get a fresh perspective.

A person who acts as an electronics consultant to Target told Reuters the company was disorganized and made slow decisions, putting off many suppliers, which is reflected in their stores.

"They knew who their shopper was and how to please them but now they've kind of forgotten that," the person said.

Walmart, for instance, is attracting bargain-hunting higher-income customers with its 400 million online products that are rivaled only by Amazon.

Target - once known for its cheap-chic wares and out-of-the-box marketing - has failed to excite shoppers with recent tie-ups like the one with Kate Spade, a bagmaker that is weighing on its parent Tapestry's profits.

"Many in the market favored an external hire, arguing that would be the only way to re-energize this retailer and jump-start its strategic reinvention," said Michael Lasser, analyst at UBS.

Still, Fiddelke is likely to be viewed as a safe pair of hands, having already overseen a big efficiency drive, said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

BIGGEST CHALLENGES

Target's stock is down 23% over the last five years, during which Walmart has risen 125% and Costco has more than tripled.

Walmart, scheduled to report earnings on Thursday, has long sacrificed margins for high sales volumes, especially on grocery. It has pumped money into expanding its home-delivery reach and, taking a cue from Amazon, included a subscription to Paramount+ streaming with its annual membership.

Target charges the same as Walmart, but without the movies.

Expanding its e-commerce business and building a delivery infrastructure have been among Target's biggest challenges.

Plus, the company's high-margin discretionary merchandise has for a few years now failed to resonate with buyers as their budgets shrink due to inflation and, more recently, tariffs, analysts said.

The company pulled back its support for diversity, putting off some customers and, in the face of persistent theft, it simply locked up many goods.

Fiddelke acknowledged many of these problems on Wednesday, saying Target was "urgently adjusting" to tariffs and changing consumer needs, embracing technology to automate manual work, and working to mend problems like slow decision-making, siloed internal goals, and a lack of access to quality data that would drive better inventory planning.

Doubts remain, though.

"The whole point of a board is to challenge thinking to ensure good decisions are made. Target's board and senior team do not seem to do this," said Neil Saunders, managing director at data analytics firm GlobalData. "They almost exist in their own bubble."

(Reporting by Siddharth Cavale in New York, Juveria Tabassum in Bengaluru, and Sayantani Ghosh in San Francisco; Editing by Peter Henderson and Muralikumar Anantharaman)