Target commits some grocery sins

Articles
June 03, 2009

Target commits some grocery sins

Most of the buzz surrounding Target these days is its proxy fight with Pershing Square and its loss of ground to Walmart in this recession. Hip hasn’t cut it among shoppers looking to save, but when Target expresses plans to help cut costs for its customers, it is immediately tagged as a Walmart wannabe. That’s not really fair, because Target’s distinct style will continue to play through in its initiatives and the chain will stay true to the promise of its marquee brand. Target has done a smart job of appealing to private-brand shoppers in food with its Archer Farms and Choxie labels, which have attractive trade dress, end-aisle positions with high visibility, and appealing value positions. Our concerns with Target and food lie less in the brand marketing and pricing strategies, and more in the lack of convenience, the inconsistency of day-to-day operations, and the limited assortments. The biggest problem Target has with food is its location deep within the store. It forces shoppers to go a long way and spend a lot of time and energy to see what’s on hand. This could be remedied with different layouts in new and remodeled stores, if Target feels it fits its overall brand image, but would be difficult to change within existing stores.

Most of the buzz surrounding Target these days is its proxy fight with Pershing Square and its loss of ground to Walmart in this recession.

Hip hasn’t cut it among shoppers looking to save, but when Target expresses plans to help cut costs for its customers, it is immediately tagged as a Walmart wannabe. That’s not really fair, because Target’s distinct style will continue to play through in its initiatives and the chain will stay true to the promise of its marquee brand.

Target has done a smart job of appealing to private-brand shoppers in food with its Archer Farms and Choxie labels, which have attractive trade dress, end-aisle positions with high visibility, and appealing value positions.
   
Our concerns with Target and food lie less in the brand marketing and pricing strategies, and more in the lack of convenience, the inconsistency of day-to-day operations, and the limited assortments.

The biggest problem Target has with food is its location deep within the store. It forces shoppers to go a long way and spend a lot of time and energy to see what’s on hand. This could be remedied with different layouts in new and remodeled stores, if Target feels it fits its overall brand image, but would be difficult to change within existing stores.

Repeated store observations by SupermarketGuru.com show that shoppers who make the effort to buy food at Target are often disappointed by out-of-stocks, especially in high-rotation perishables like milk, and in discounted products.

As Target assesses its grocery expansion through 2009—including its price-match policy in some Minneapolis (HQ city), Denver and Orlando stores—it needs to look critically at everything it does to induce and inhibit sales.

Operational shortcomings are a challenge for every retailer, but especially for a chain that built its image on hard goods and may not be fully sensitive to the sheer disappointment felt by food shoppers who come to the store in good faith to save and go home with less than expected.  It’s a retail sin to inflict this on shoppers, and it will hurt Target in the long run.

Target also needs to think more about the physical barriers it presents to food sales, and some innovative ways around it within existing stores where departments can’t be moved because of the equipment involved.
   
All retailers want to sell food because people shop for food more often than anything else. It is the key to customer traffic, but Target still has its hand in its pocket searching for the ring.