I wouldn’t say that Target’s apparel efforts have thwarted grocery; perhaps it’s more accurate to say that Target’s past distaste for low-margin, un-groovy categories has negatively impacted their non-discretionary relevance.

Target knows that its “Expect more, pay less” premise is a bit lopsided right now and that, when they are turning designer collections in 30 days (vs. 90 when Go International was first launched), they must drive frequency even at the expense of margin. Target guests may need to look at that cute outfit more than once before pulling the trigger, even if it is a “value” when compared to department store prices!

Based on my experiences in Atlanta, I don’t think the apparel perception is what drives Target’s grocery problems. I think it’s more likely that its grocery assortment is the issue. I can go into a Wal-Mart Supercenter and find most of the brands I want most of the time (not expecting to find upscale or specialty products). I couldn’t do a regular stock-up trip at SuperTarget–the assortment isn’t there.

It would be interesting to know if Target tried to introduce a larger assortment and advertised that fact, would grocery sales improve?

A timely subject considering that the front cover of yesterday’s Target sale tab featured Archer Farms products, with the emphasis on price more than ever. Target has a couple of interrelated problems executing its food strategy: 1. Its mix of store locations do not have anything approaching the critical mass of Walmart’s supercenters. As long as a large number of Target stores are regular-format or Greatland stores (instead of Super Targets) they appear less committed to the business than Walmart. 2. Walmart has the unbeatable perception of being the price leader on “necessities,” including food, HBA and other categories requiring frequent trips to the store. Target continues to define itself as the go-to discount store for fashionable housewares and cheap-chic fashion. This may the right brand positioning for Target but doesn’t help it in the market share battle over food. 3. Archer Farms has become the “face” of Target’s food business, along with specialty products like Choxies. “Aspirational” may be true to Target’s overall brand position but is wrong for the times. 4. Target’s in-stock… Read more »

Target built its consumer perception around design. Guess what? It worked. Now they want to be top of mind for groceries? If they engage in this chase to change consumer perception they stand to lose a lot more than just grocery sales.

First, especially in this environment, WMT is beating everyone. The numbers speak for themselves.

Second, Target is not considered a price leader and this is, in large part, both a reason for #1 and a reason why there are others that are more competitive for groceries.

Last, Target has built a brand largely on style, design, and affordable chic. This has nothing to do with groceries and vice-versa.

Except for WMT, there are very few that can be everything to everyone and carry the inventory to back it up with low prices.

I think I told the reporter that it was Target moving up in market share in Minneapolis. They’ve been building stores just so they can say they have more market share than Wal-Mart in their home town. I think in the Twin Cities they would build as many stores as needed to make sure Wal-Mart did not pass them up. What Target needs to do is to follow through on the value end of groceries and sell groceries for the same price as Wal-Mart. They also need to ad-match all competitors the way Wal-Mart does. If you go to Wal-Mart with a Target ad, they gladly match the price. But going to a Target with a Wal-Mart ad, they look at you like you’re nuts. Outside of the Twin Cities, Target can’t compete in perishables because their volume is so low. Maybe they should get sharper on price. If you look at market share stats, Target has never seemed to make it to double digits anywhere when it comes to groceries. But give them credit… Read more »

In my opinion, Target’s problems are that it doesn’t give the consumer any reason to shop there. It’s not competitive on price, has smaller selections, doesn’t run grocery ads, and just gives the impression that they are not serious about selling groceries. The only plus that I can think of is that the stores are always clean.

Target has built its reputation in all areas where it does well on value. That’s still a good proposition for groceries, in particular food. Yesterday, I visited a ‘two story’ Target. It was a new and honestly fascinating approach to locating a store in a densely populated retail and commercial area where footprint space was limited. I’m not so sure it will be successful, but it was a way to fit a store into an area where they otherwise might not have been able to do so. Parking ‘underneath’ was tight and difficult to navigate. If I lived closer, I’d have to admit I would think twice before going again. However, more to the point, it was sparse in traffic while Costco across the street was overwhelmed. When touring the store, the ‘Grocery’ section was not called out, in fact, it didn’t even stand out. I was surprised. The store was otherwise unremarkable compared to any other Target other than the really cool cart escalators both up and down to the parking garage. Why I… Read more »

Target sells groceries? Since when?

It was Shakespeare who said:
“An elongated pop aisle makes not a grocery store…”
(or maybe it was me?).

It’s obvious what Target has to do if they want a piece of the grocery pie. Build up the business from the inside. Let the customers in the store know you are a competitive player. I see in-store media possibilities here. I like the creative merchandising ideas too. There are clever ways to prop up low inventory numbers and fresh departments have the most opportunity for image. They have to make customers want to shop the grocery aisle. ‘We’re experts in clothing, why not give our grocery a try?’

Target does have the merchandising capability to execute an excellent program. They need to really commit to it though. Messy and empty sections can kill your reputation in every department.

I don’t think Target’s problem is apparel retailer perception. It’s higher price perception and specialty perception. The idea of making “one stop” getting a household item and filling the grocery staples list fits with Walmart but not Target. Archer Farms is perceived as a specialty food company, not as staples.

The double-edged sword of an effective positioning is that you are what you are–whether that is what is hot or not. Just as Walmart was not able to achieve “cheap chic” and probably never will, Target will never own “lowest prices every day.” That’s just the way it is.

The best thing Target could do right now: get out of groceries.

If the downturn lasts longer than a year or 18 months (and it well may), Target has to find a profitable way to focus on its core business to stay alive. Like everyone else. What is its core business? Soft goods? Housewares? That’s where they need to drive a compelling point of difference. Forget groceries, it’s a sinkhole.

Target has developed a certain culture in its buying offices that crosses over from apparel to all other areas in the store, to a fault. The mindset of carrying only the top brand names in every category often overlooks another element of what consumers want to buy on every shopping trip, including products that are niche, specialized, and more specific to her needs. Target often doesn’t carry such items, as they are not ranked within their categories in the top two or three UPCs, and therefore the consumer goes elsewhere to do her total shopping.

Having no hard data, my perception has always been that Target mainly picked up grocery shoppers who were already in the store for another reason and bought a few groceries to avoid making a second stop elsewhere. If this theory is correct then the slowdown in foot traffic by their core “fashion” customers could not help but also create a slowdown in their grocery sales.

I agree with those here who have suggested Target may not benefit from being in the grocery business at all.

Walmart has built their strategy of selling everyday basics at the lowest possible prices. Within this strategy, grocery fits very nicely, and has clearly been contributing significantly to their success in recent months.

Target’s strategy is built around fashion. Grocery is not a natural fit, either operationally or in the customer’s mind.

For the last 15 years Target has done a remarkable job in segmenting the market and themselves from the price oriented mass merchant. They chose to sell better products at slightly higher prices. The transition in the marketplace worked perfectly. Kmart disintegrated and the Mass marketplace was bifurcated between Wal-Mart and Target with each having distinct positions that proved profitable. Unfortunately, the one thing that Target did not do during this time was develop distribution and operational expertise as Wal-Mart did. The move into grocery by Target is a giant step away from the winning strategy they have executed. They are taking on Wal-Mart directly and Wal-Mart holds the high ground. Groceries are not the products that easily fit into the Target brand persona and Target’s efforts to promote groceries will denigrate that persona. Target will not be able to compete operationally with Wal-Mart. Every cost that exists in a grocery operation will be greater for Target. (See last week’s discussion on Wal-Mart’s category strategy.) Even Wal-Mart didn’t initially roll out their grocery business through… Read more »

Target’s perceptions of their grocery business border on the ridiculous. That they cannot compete with Wal-Mart and other grocery stores because their volume isn’t big enough, is putting the chicken before the egg. They must first drive volume (and lower prices) and competition as well as full turns will then follow. Target has the purchasing power, contacts and store capabilities to make this happen, if they choose. However, this is clearly not an alternative for them until management clearly starts to recognize that price is a driving factor to increase velocity in the grocery sector.

In markets where Target faces traditional hi-lo grocers, they do not promote their food enough to establish an attractive price image. Their ads cover both regular Target stores (with some food) and Supercenters and have most of the food items in the back of the ad. To attract more people to their supercenters, they need to promote more of their food prices.

This is a very timely headline and subject. Target has never promoted the idea of themselves as a grocer. Not really even as a fill-in trip. Occasionally, they will advertise something at a competitive price, but never consistently or often enough to be top of mind. The Super Target near my home is soon-to-be matched up with a Wal-Mart Supercenter. It appears Target is being “targeted” by their nemesis on all fronts. The current economy is not their friend either. Target has done such an excellent job of positioning themselves as “upper end chic discount” they will never be able to approach Wal-Mart’s persona as the low-price leader. A year or two ago it was working wonderfully; both retailers were positioned at opposite ends of the spectrum, which is a bit simplistic, but overall, it’s true. Now Wal-Mart is reaping the benefits and Target will not be able to counter unless they begin to under-play the “cheap chic” in their advertisements. This is now a time of value, which does not always equal price. The… Read more »

Target is such a tremendous retailer for all the reasons our colleagues have already described. We shudder when we think they might try to out-Walmart Walmart. Target should stick to their knitting and find those categories where they can offer the best combination of fashion and price. Archer Farms is a terrific example. Traditional grocery brands are not. The best path for Target is to emphasize lower pricepoint housewares and clothing basics that are sensitive solutions for today’s tough times.

Target doesn’t compete head to head with Walmart on apparel. They cater to a more upscale demographic that shops the specialty retail and department store circuit. They won that one with their “cheap chic.” If they want to grow their grocery business, they need to pursue the same shopper who buys their clothes; the more upscale shopper. If they want to be a grocer they should remember who their customer is. They should become the discount Whole Foods/Central Market type, offering “cheap organics” and aggressively market it that way. Right now the upscale grocery shopper is looking for a cheaper, yet quality alternative to the Whole Foods type grocers. Target could win this one.

In today’s tough economy, it is critical to connect with core shoppers–those who “get” the retailer value proposition and drive 75% of sales. From the mixed results, this connection is not working with Target shoppers. Successful retailers have a clear consumer centric focus, and then execute very well. Target will have to dig deep to clarify the message and give shoppers a reason to choose their stores over other choices.

When it comes to Target’s brand perception, don’t forget, they’ve been positioning themselves as a FASHION retailer for a long time, which, given what we’re up against now, is worse than just an apparel retailer. It implies that everything is fashionable, which translates to more expensive in the minds of most consumers.

Walmart, on the other hand, has always positioned themselves as a value brand, regardless of category, which is currently so spot on, it’s driving them to new heights.

You have to take your hat off to Walmart as three years ago, everyone was talking about how “out of touch” Walmart was compared to Target. Who looks out of touch now??

We were in a Super Target earlier today and the aisles were almost empty. Two cash registers running out of 32. And this was at a time when a nearby Walmart parking lot was nearly full.

I agree with Ms. Howe–Target generally remains known for design. It is seen as “hip” and eventually it is going to want to be known for those attributes again–of course it has to ride out the current economic difficulties.

The article hit the nail on the head–Target is seen as an unusual place to buy groceries.

I believe the problem beyond poor execution is that they don’t really have a grocery person trying to head-up the grocery side.

They can’t get to critical mass volume-wise now, I’d pull the plug and get out of perishables and turn their buying power to consumables, snacks, pop, and in-outs. that way they can get right on prices and pick up incremental sales and this takes very little labor if you use DSD.

Kmart tried to compete on food and they went down for the same reasons.

Since the proof of the pudding is in the *eating*, Target should offer in-store sampling of their Archer Farms products (which most consumers haven’t heard of and are actually a gastronomic cut above the rest).

Take Costco on Saturday for example. A customer can flit from sample-station to sample-station and consume an entire lunch-worth of samples. And as that clever trick works its magic, they’re suddenly buying improbably large packages of hitherto unknown food products! Smart move.

So get cooking, Target!