Target plans to open its first company-owned food distribution center in Lake City, Florida in the summer of 2008. The facility will be used to store and transport frozen, refrigerated and fresh produce to company stores in the Southeast. While the facility will be owned by Target, the company has said it will partner with Supervalu to operate the center.
"Our food offerings continue to expand across all Target store formats, and we felt now was the right time to enhance our internal capabilities with respect to the direct sourcing and food distribution center management," said Mitch Stover, Target's senior VP, distribution services, in a company press release. "Target will continue to partner with valued wholesale distributors to ensure our guests receive the freshest and highest quality food products possible."
Janel Haugarth, executive vice president and COO supply chain services for Supervalu, said, "Target is a valued supply chain services customer and we look forward to supporting their future store expansion plans across the country, as well as, the new third-party facility management relationship."
This is not the first time the companies have worked together to supply frozen, refrigerated and fresh food to Target's various formats. In 2003, the companies began using a Target dedicated facility owned by Supervalu to supply the retailer's stores in the Southwest.
Target's strategy calls for the company to open additional food distribution centers around the country over the next several years. The company currently self-distributes shelf-stable foods.
Discussion Questions: What do you think about Target's strategy regarding the opening if its own distribution centers for frozen, refrigerated and fresh foods? Do you have any thoughts as to how the Target/Supervalu relationship will evolve?