Through a special arrangement, presented here for discussion are excerpts of a current article from Refrigerated & Frozen Foods Retailer magazine.
One dictionary definition of 'target' is 'a goal to be achieved.' Some would say that Target is getting closer, but still hasn't found the bulls-eye.
The good news is that Minneapolis-based Target is moving to self-distribution of perishables, which will almost certainly make it more competitive. It also hires terrific young buyers/managers and its SuperTarget stores are clean and bright.
The bad news is that SuperTargets still seem unable to translate the company's brilliant fashion savvy over to the food side. Those buyers/managers are often inexperienced and rotated in and out of jobs too quickly. And there is consensus among those we interviewed that the perishables areas of those clean, bright stores are sadly lacking in traffic.
Most observers say the Archer Farm brand is doing a decent job, but some believe it could use more promotion and merchandising.
Target does many things right, of course. Although it hates comparisons to Walmart, it stays very close to Walmart prices. Quite wisely, we think, it doesn't see the need to match them.
"They know they offer a superior shopping experience, so 'close' can work for them," said one competing retailer. "By meeting this strategy against Walmart, by default they are lower than traditional supermarkets. Only limited assortment (Aldi) is lower, but of course their big trade-off is in variety and shopping experience."
Donald J. Stuart, partner, Cannondale Associates, Wilton, Conn., said, "Target's private label strategy has been innovative and they will need to continue to pursue this path in the grocery perimeter. The challenge is being both innovative and driving store productivity. Often some of the most innovative private label products don't turn. They need products that are both distinctive and highly productive and this will be the sweet spot to win in frozen and refrigerated."
Most private label vendors we interviewed reported good dealings with Target, although two complained of having invested heavily in relationships that ended abruptly with the arrival of a new buyer. And another vendor who chose to discontinue a private label line with Target echoed Stuart's comments: "They need to promote better and merchandise with movement in mind, and not necessarily a unique assortment. They need to think more like Trader Joe's if they want to migrate their general merchandise strategies into food. Otherwise, they need find a strategy that differentiates them from Walmart."
One vendor said Target needs to invest more heavily on the food side -- particularly in perishables -- but that this may be difficult now because of tight money and the economic downturn.
Kevin Janiga, president of Winsights Marketing, said, "My impression of Target is that they are going through an identity crisis on the grocery side. While they are extremely savvy fashion marketers, they have struggled to develop a brand positioning on the grocery side that resonates with consumers.
"For example, in the Tampa area, Target is the destination of choice for affluent, suburban females to buy general merchandise and clothes. The GM side of our local Target supercenter is always brimming with activity. However, the grocery side is a ghost town. All these same affluent consumers shop Publix for their groceries."
Discussion Questions: What has impressed you about Target's food assortments and what needs to be worked on? How should Target be positioning its food assortments?