Chain Targets Food for Growth
By George Anderson
Target plans to expand the amount of space it devotes to food in its discount stores to drive traffic.
According to a report in the Minneapolis Star Tribune, Target plans to expand the food sections by as much as 50 percent in existing stores. All new standard store locations will be rolled out with the company’s P2004 concept that incorporates a higher profile for food.
Morningstar analyst Joseph Beaulieu said, “Food is a major traffic driver. People who go to Target for groceries will also pick up laundry detergent and paper towels.”
Stan Pohmer, a former executive with Target, said the company is moving in the right direction although he cautioned that, if consumers begin shopping the store just for groceries, it could negatively effect profit margins.
Target has been much slower to move into the food business than its bigger rival Wal-Mart. The Star Tribune points out that there are nearly 2000 Wal-Mart Supercenters in operation today while there are only 158 SuperTargets.
The chain also intends to make changes to its SuperTarget locations. The company has announced it will offer more ready-to-eat items into its product mix.
Moderator’s Comment: How do you rate Target’s food business performance to date? What will the chain need to do in its discount stores and SuperTargets
if it is going to be even more successful in the future? –
George Anderson – Moderator