Target Continues P-fresh Makeover


As previous RetailWire discussions on Target’s P-fresh have shown, industry experts are divided on just how successful the chain’s grocery initiative has been. A RetailWire poll last November found that 68 percent gave Target either a B (33 percent) or a C (35 percent) for the effort.
There is no denying, however, that even with room for improvement, Target is making itself a force in grocery retailing. Supermarket News has the chain ranked as number four on its list of the Top 75 food retailers in North America.
The chain continues an aggressive remodeling program to bring an expanded selection of fresh, frozen, refrigerated and shelf-stable groceries to its stores. Target announced this week that it expects to complete 90 more P-fresh makeovers by June 24.
"We are excited to incorporate our enhanced food assortment into additional stores," said Annette Miller, senior vice president of grocery, Target, in a statement. "By remodeling these stores, we bring an expanded offering of fresh food and added convenience to our guests in these communities."
Target expects to have more than 1,100 of its current 1,765 stores with the P-fresh layout by year’s end.
- Target Remodels 90 Stores to Expand Fresh Food Selection – Target Corp.
- FD Buyer: Do Target’s Customer Counts Seem Lower on the Food Side? – RetailWire
- Top 75 Retailers & Wholesalers 2012 – Supermarket News
Discussion Questions: What do you see as the greatest strengths of Target’s grocery business? Where do you see the biggest opportunities for improvement?
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9 Comments on "Target Continues P-fresh Makeover"
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Target’s greatest strength in its grocery business is its patience. They appear to be confident that they will eventually not only prevail but will become a major factor in U.S. food retailing. They have the patience, determination and resources to slowly move in that direction. They continue to study what works and what doesn’t.
They have become more competitive in their pricing. They discard errors rather quickly and continue to experiment. They are continually working to establish a high-level private label program via their Archer Farms label. They still haven’t learn how to put a “sense of theater” into their food sections but perhaps they will. Competitive pricing may not be the only “sufficient” with their more discerning audience.
Their meat departments are sterile with everything pre-packaged outside the store. Thus they have a big opportunity area by showing some human activity in and/or around their meat cases. More animation would benefit their bakery and dairy sections. They have a good lock on most everything except “sizzle.”
The greatest strength is a strong base of loyal customers that will be exposed to their grocery business by store traffic or circulars and that convenience will eventually lead to adding groceries to the shopping trip.
Target is in an enviable position when it comes to opportunities; from capitalizing on the grocery experience expectations by customers — such as a full service deli counter — to expanding Target’s “store-within-a-store” concept to their grocery business.
Besides price, another key strength of Target is their brand’s strong appeal to Millennials (i.e. Grocery’s Next Generation). Gen Y highly values one-stop shopping experiences (Target, Walmart) and places traditional grocery stores third on their list of ideal places to shop for groceries (specialty stores are #2). Target’s private label brands are well positioned to reach this new demographic of shoppers and with quick trips replacing stock ups, Target can take advantage of this new reality.
According to recent research we conducted (Supermarket Showdown), the biggest opportunity for Target’s grocery business lies in improving the shopping experience (breadth of offer, strong navigational cues, customer service, inspirational environment, etc.) They fall woefully short in these areas compared to other national grocery stores.
While Gen Y is a very frugal demographic cohort, over time if Target doesn’t deliver the “experience” they’ve come to value in other retail venues, Target may not gain their “lifetime” of loyalty in groceries. Experience trumps convenience for Millennials.
One of the reasons for reading RetailWire is that the discussions can drive a different perspective to a problem. This discussion has just done that for me.
We have watched for years as the lines between retailer formats have blurred. This has mostly been a one way street as traditional department and general merchandise stores have moved into the categories carried by Supermarkets. Supermarkets have taken brief excursions into expanded general merchandise categories, but for the most part have not carried the variety of merchandise available in department stores.
Maybe the expanding Internet has given Supermarket Retailers the tool they need to turn the tide. Specifically, I am thinking about the whole “order online and pickup at store” model. Supermarkets are the most often visited retailer. What if you could pick up your catalog or Internet purchases without shipping cost when you visited the Supermarket? It seems like a robust Internet presence combined with a fulfillment network could create a whole new retail format.
More ready-made “meal solutions” are a big area of opportunity. Getting more frequency of store visits and providing convenience products and services seems like a natural path for more growth.
I’m not sure I agree with the premise of this piece (that “there is no denying Target is making itself a force): if you’re fourth — or maybe third — in every market you’re in, you might be fourth nationwide, but I’m not sure that really makes you much of a force.
Anyway, the main problem — as a number of people have pointed out — is the limited selection. Opportunity for improvement? Simple … bring back the Cinnabon bars!
Target’s greatest strength is the near-bullet-proof loyalty it enjoys from many of its customers. Its loyal base looks for excuses to make purchases at Target and groceries are a perfect reason to make the trip sooner than later. Target’s biggest opportunity for improvement is to create a more intimate shopping experience in grocery, and across the store for that matter. The hike to grocery is cold and cavernous and Target’s uber-spaced departments render the term “adjacency” an oxymoron. If Target is to get the full benefit of those (hopefully) more frequent food-driven trips, it needs to tighten things up or forfeit its cross-the-aisle opportunity.
One stop shopping to drive longer customer duration in its stores is the key benefit of this program. Whether it will drive more profits is the big question. Grocery is not as profitable as many hard goods, and replacing these at store level might be a poor decision in terms of corporate profits. Only time will tell….