Richard J. George, Ph.D.'s RetailWire Blog

January 22, 2010

FROM RETAILWIRE:
Target has a multi-pronged approach for the future and the chain is hoping its strategic plan will help it achieve growth for the short-, medium- and long-term. Where do you see the greatest opportunities for growth for Target?

MY COMMENTARY:
I believe the key to Target's success (short and long term) is in the nature of its food offerings. Everyone is selling food because of its traffic building nature. The Walmart model of selling food as a break-even to generate more profitable non-food sales has worked well. However, Walmart's most successful food operation, namely the true supercenter, is one that includes the entire array of food, i.e., produce, bakery, deli, meats, etc. Its non-supercenter format with limited grocery does not draw the food shopper as a destination. Shoppers tend to pick up some food offerings, e.g., water, condiments, cereals, on that trip while visiting for a non-food item.

Walmart developed a very successful supercenter model that Target could emulate by doing the same thing on the food side as Walmart with the Target cachet/differentiation of "cheap chic."

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Target Outlines Plans for Future Growth

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