“Expect More. Pay Less.” That’s the Target tagline and now the company appears
intent on getting consumers used to the idea of expecting to buy groceries
at prices well below most other food outlets.
The company has been expanding food sections at stores across the country
for some time now and is currently testing fresh produce and meat at a number
of its conventional discount stores. The test is expected to reach 100 stores
by year-end and may eventually be standard in all Target stores.
Kathee Tesija, executive vice president of merchandising at Target, told
the Minneapolis Star Tribune that test stores offer about 90 percent
of the categories and half the assortment of SuperTargets. Roughly 20 percent
of food sales in the test stores are in Target’s private label brands.
She shopped the test stores to see if it worked for her family’s grocery
“For two teenage boys and a busy family, I could get all the basics, and
certainly enough to make dinner,” Ms. Tesija said. “Maybe we don’t have 10
choices, but we’ve got two or three.”
Initial results of the test stores
are said to be encouraging for food and beyond.
“With these test stores,
the day we set it up, the results popped and stayed up,” Ms. Tesija said. “It
Jeff Klinefelter, a retail analyst
with Piper Jaffray, told the Star Tribune, “Target’s core customer is
showing a willingness to direct more of their food dollars in a Target store,
so it’s an opportunity to expand wallet share. It could be a much shorter-term
driver of comps and profit improvement as opposed to embarking on some acceleration
of SuperTarget growth across the country.”
Questions: Has Target hit on a viable food strategy with its test of expanded
grocery departments including fresh produce and meat in its discount stores?
What do you think of it expanding food in its discount stores rather than
focusing more on the SuperTarget concept?