Will dedicated teams lift Target’s grocery business?

Is Target finally getting the order of the figurative horse and cart straight when it comes to its grocery business? The chain, according a Wall Street Journal report, is creating dedicated teams of employees in its stores whose sole purpose will be to work in grocery and not split time in other departments. With its new focus, each Target store will include a grocery team of between 10 and 60 associates. The company is also in the process of building a regional leadership structure with grocery directors who will be responsible for overseeing 60 stores. To date, Target has dedicated grocery teams in place at around 450 stores with another 150 coming on line in the next month, according to the Journal. Target currently operates 1,797 stores. It has hired 10 grocery directors with plans to add one or two per key market going forward. On Target’s second quarter earnings call last month, CEO Brian Cornell discussed the improvements the chain has made in its grocery business, including “assortments, quality, freshness, presentation and in-stocks.” He also admitted that, despite the positives, Target experienced a “small comp sales decline” in grocery during the period. He did express optimism, however, that the chain is on the right track when it comes to grocery, pointing to Target’s LA25 test stores where sales are two to three percent higher than in comparative stores and perishables are up five percent. Among the changes Target has made in the LA25 stores are wood grain signs and updated shelving. The chain has increased sampling and put a greater emphasis on cross-merchandising. In fresh foods. Target has updated lighting, flooring and signage while adding new produce bins to enhance product presentation. “Guests have told us the new food area now feels more intimate and separate from the rest of the store, providing a distinct grocery shopping experience they prefer. We are very encouraged with these initial observations and we will continue to leverage learning from these stores as we work to improve grocery performance across the chain,” said Mr. Cornell (via Seeking Alpha).

• Target Revamps Staffing for Grocery Business – The Wall Street Journal (sub. required)
• Target's CEO Brian Cornell on Q2 2016 Results (Earnings Call Transcript) – Seeking Alpha
• Get a First Look at New Enhancements Just Unveiled at Target’s LA25 Stores – Target Corporation
• Is Target getting its grocery act together? – RetailWire