Target looks to bag market share through its grocery biz
It’s not a surprise, considering Target CEO Brian Cornell’s history as an executive at PepsiCo, Sam’s Club and Safeway, that he would see grocery as an important element in his plan to revitalize the chain’s business.
One thing is clear, Mr. Cornell believes that Target needs to establish its own unique identity if it is to make good on this "critically important area of opportunity," as he described it on the company’s fourth quarter earnings call last week.
Speaking with analysts, Mr. Cornell said the company recognized the need to improve the in-store experience and make changes to its assortment.
"We all know food trips drive traffic. And we want to make sure we complement our signature categories with guests that are coming to us for the great food products we can curate," said Mr. Cornell. He specifically mentioned: "more organic, natural, gluten-free items [are] critically important to the guest."
Grocery, according to The Wall Street Journal, represents about a fifth of Target’s $73 billion in annual sales. According to the paper, Mr. Cornell is planning to focus on key grocery categories including craft beers and wine, coffee and tea, snacks and candy, fresh meat, granola, produce and yogurt as a means to differentiate itself from Walmart and other competitors.
The Journal also reported that Target is searching for a new executive to lead its grocery business. Mr. Cornell and Target’s chief merchandising officer Kathee Tesija are expected to share more details of the chain’s plans for its grocery business in a meeting with analysts today.
- Target’s CEO Brian Cornell on Q4 2014 Results (Earnings Call Transcript) – SeekingAlpha
- Food in crosshairs at Target – Supermarket News (sub. required)
- Target Revamps Groceries for Millennials – The Wall Street Journal (sub. required)
What do you see as the biggest issues that have held back Target’s grocery business to date? Where are the greatest opportunities for future growth? From which chains would it likely draw customers?