Next Generation SuperTarget to Open in Atlanta Area
By George Anderson
Shareholders will get the first glimpse of the new generation SuperTarget store when the company holds its annual meeting next month at a store in Acworth, Georgia.
According to the Atlanta Business Chronicle, the new SuperTarget will include a number of aesthetic changes such as larger windows to allow for more natural light in the store and changes to how various product categories are grouped.
Importantly, the store will focus more on grocery and health and beauty care, with the amount of space devoted to each expected to double that currently used in the company’s existing SuperTarget locations.
Carolyn Brookter, a Target spokesperson, said, “The bottom line is, we want to continue to make our stores more convenient for our customers. And with this SuperTarget, we want to provide a total shopping experience that also fits with our brand — where customers can enjoy shopping in an attractive and engaging environment.”
Mark Mille, an analyst with William Blair & Co., said, “(Target) has a long history of innovation and adding new merchandise. It’s always testing new ideas and it’s performed very well and continues to perform well.”
The Acworth store is expected to open in July and serve as the anchor for 40-acre Lakeside Marketplace retail development. It will be located at 3352 Cobb Parkway N.W. A Wal-Mart Supercenter currently serves the same market area with a unit a few blocks from where the SuperTarget will open.
Moderator’s Comment: What have been the relative strengths and weaknesses with the current generation of SuperTarget
stores? What do you expect the company will address with its new generation stores and what impact will that have on the top and bottom line performance of these units?
– George Anderson – Moderator
Perception as being a primary source for food shopping seems to have been the biggest weakness for SuperTarget. This has resulted in having a low sales per sq. ft. in “food ops” compared to the competition. Low sales means scaled back perishables departments that end up having low product levels similar to Super Kmart. The good news is SuperTarget seems to be improving percentage-wise compared to its competitors. This is mostly due to starting out at such a low sales volume. Still SuperTarget is a long way off from performing at Wal-Mart levels. Their top “food ops” departments in the country only perform similar to what the average Wal-Mart does.
Lately, I have seen bigger increases in individual store sales. Some of this seems to be a result of the store maturing and customers starting to catch on. SuperTarget, not being well known for groceries, just seems to be taking longer to mature.
I’m hearing SuperTarget is becoming more price competitive also. Perhaps having a higher price perception may have been hurting them in the past. I think in the future, SuperTarget will try to promote its pricing.
Sometimes the discussion questions seem like Kismet. For some strange reason I found myself in what I thought was a Target superstore just yesterday. The store seemed to be a city unto itself. So, not wanting to make a fool of myself, I checked on Target’s web site and found that the store I visited is not considered a SuperTarget. I don’t know how much more or how much bigger the SuperTarget carries or how much larger the store would be, but based upon my visit yesterday, here are my observations.
A) The store is so massive that it probably takes 15-20 minutes just to get from one side to the other without stopping to look at merchandise.
B) Very few associates were visible in the event you needed assistance…thus in my opinion, a lack of customer service
C) The store was VERY clean, well lit and friendly looking
D) It was amazing to see all the items that were carried.
E) It was a TOTAL one-stop…as long as you either knew what you were looking for or had extra time to browse.
F) Many check-out stations
If Target can work out some of the kinks, they may have a winning formula.
I still feel that Target hasn’t figured out food yet. The quality of food in the Target supercenters I’ve seen is all over the place, but is, on average, mediocre at best.
Target needs to make its food special. Just as they made the housewares special using superior design, the food needs to be special, too. Perhaps it would pay to learn from Trader Joe’s, creating proprietary items that aren’t just knock-offs, yet provide great value for the price. Otherwise, Target food margins will drag down financial performance of the whole enterprise.
It’s true that SuperTarget doesn’t have groceries mastered and it is hardly in the meat business. In addition, its deli, sushi, bakery and produce departments appear tentative and selective. So why is it staying in the food business?
As David said, like store sales are increasing, albeit from a small base. Pricing has become more competitive, and they seem to be progressing slowly, perhaps too slowly, on a learning curve. But Target is a shrewd general merchant and food is the current horse they must learn to ride better.
I’m inclined to believe that SuperTarget will master that challenge as it opens more supercenters. Thus, while I join the others who say that SuperTarget isn’t scaring its competitors and may even be considered floundering in its food business, I also believe that the weak (if that is what Target is today) have one weapon: the errors of those who think they are much stronger. Perhaps we should bring up this question again in five years.
I happened upon a Target Supercenter in Denver (Cherry Creek) a few weeks ago and walked in out of curiosity. In the grocery section, I was particularly impressed by the packaging design on the private label food items and the signage. Not surprising.
I think full food will be difficult to execute as a strategy for Target. It will take low prices to compete on food but you do not want to cheapen the entire store’s perception.
I believe they will need to go to an upscale selective market agenda. Target’s main competitor is low price everything and is perceived to have cheaper merchandise. If Target can convince its customers it has low prices along with the best quality, then it may work. If not, Target will bring itself closer to Wal-Mart. This is difficult and dangerous in my opinion.
I’m with Ryan on this. Food is all over the place – deeper than warranted in fringe items, woefully depleted in many basics.
Target apparel, in my opinion, remains over-hyped – mismatched seams, just-out-of-the-box wrinkled wovens, trying too hard embellishments…the Luella Bartley collection that launched Target’s limited-run designer program, “go international” was an exception. Well-executed, well priced, super trendy, and definitely made its own badly needed statement within the store. I hope that subsequent go international runs are as unique and appealing.
The introduction of multiple international brands in Target bath and body and their ongoing improvements in cosmetics are truly exciting. They have a real opportunity to make department stores (more) miserable in these areas…with the exception of JCPenney. Target and JCPenney, with their recently announced Sephora alliance, will emerge as the surprise personal care pair to beat.
The good news for Target is that it spent time talking to shoppers about the new super center’s needs. Few groceries think of engaging the consumer. It just didn’t throw in a sushi bar, and some upscale wine…like you know who.
Secondly, the aesthetic benefits to be seen in Atlanta, plus better meals and prepared foods presentation…will bring major difference to Target new super centers. Oh, so Target may need to add grocery space. Okay.
Target still remains a proven and very consumer centric and marketing entity of mass merchandising, and food and meals provider; while addressing groceries more. Hmmmmmmmmmm