Will Target’s new grocery boss get the job done?

Discussion
Apr 16, 2015

Target CEO Brian Cornell has made it clear that he sees the chain’s grocery business as a "critically important area of opportunity." No pressure if you’re Anne Dament and you’ve been hired to lead "the strategic repositioning of Target’s food business."

Earlier this week, Target announced it had hired Ms. Dament, an executive with more than 19 years experience at companies including Supervalu, Safeway and most recently PetSmart, to remake the company’s grocery business over the next 12 to 18 months.

"Our guests tell us they expect Target to inspire them with differentiated food offerings like we do in other areas. We have an opportunity to make food more reflective of our brand, elevate the shopping experience and make Target a food destination for our guests," said Mr. Cornell in a statement. "Having previously worked alongside Anne, I know her industry expertise and proven ability to reinvigorate existing businesses make her the right leader to drive our reinvention."

Grocery represents about a fifth of Target’s overall sales. Mr. Cornell has cited six categories that he believes can be used to differentiate the chain and drive its numbers higher: better-for-you snacks; coffee and tea; premium sauces and oils; specialty candy; wine and craft beer; and yogurt and granola.. The chain also plans to expand its selection of organic, locally grown and gluten-free items.

What do you think are the steps necessary for Target to reinvent its grocery business? Is Anne Dament the right person for the job?

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20 Comments on "Will Target’s new grocery boss get the job done?"


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Dick Seesel
Guest
7 years 2 months ago

All of the categories mentioned by Mr. Cornell (snacks, coffee, craft beer and so forth) represent a reversal of the “commodity” approach favored by Greg Steinhafel and his team. While a niche approach to the grocery business is more consistent with the Target brand, it may not drive enough volume to justify the massive capital investment and space reallocation devoted to food over the past five years or so. The question is whether a modified Trader Joe’s approach will compel Target’s customers to do most of their grocery shopping somewhere else.

Paula Rosenblum
Guest
7 years 2 months ago

It’s hard for me to see that Target can seriously differentiate through its grocery business. I’m perhaps stubbornly believing that the company has a far better chance for success putting its emphasis back on general merchandise and apparel of the unique and chic variety, and de-allocating grocery space.

After all, it’s hard to out-Whole-Foods Whole Foods, and it’s hard to out-Trader-Joe Trader Joe’s.

I wonder if Mr. Cornell, coming from the food business, is falling into the “if you have a hammer, everything looks like a nail” trap.

I know grocery drives traffic. I just don’t see it driving a lot of margin for Target.

Max Goldberg
Guest
7 years 2 months ago

To increase its share among grocery retailers Target needs to completely redesign its grocery departments and lower its prices. The current departments are drab, unimaginative and uninviting. The assortment of products is limited. Shelves too often show out-of-stocks, and Target’s prices are frequently beaten by local and national competitors. Ms. Dament has good grocery experience, but until Target changes the way it thinks she will be pushing a boulder up a hill.

Mohamed Amer
Guest
Mohamed Amer
7 years 2 months ago

The process has to start with a vision of what that business will look like in order to “inspire with differentiated food offerings.” Target’s non-food merchandise differentiates on design, quality and value.

Target needs to create excitement in their assortment and boldly communicate the repositioning. They can work with CPG companies for new packaging, create interesting private label, eliminate certain ingredients (GMOs, high fructose corn syrup, etc.), increase locally-sourced produce and dairy and bring in unique or seasonal products. Completely new visual elements will be necessary to emphasize the new positioning. They can pilot different combinations to test performance.

This could be an opportunity for Target to upend traditional product-driven category management approaches by creating consumer-driven assortments responsive to local taste.

Ms. Dament seems qualified to take on this strategic repositioning but the role ought to blend her grocery history while adding a fashion component to the business. Grocery can be emotional as well as meeting basic functional needs.

David Livingston
Guest
7 years 2 months ago

First move the grocery department in the PFresh stores much closer than the current 225 feet from the cash registers. Then add meat, produce, bakery and deli. My gut feeling is that nothing much is going to happen. This news story about Target has been getting recycled for 20 years, just the names have changed.

J. Peter Deeb
Guest
7 years 2 months ago

Target needs to decide what “animal” it is in the food business chain. The current offering is easy to improve on but Target needs to focus group their core shoppers and see what they want in the area of food. I seldom see a cart full of groceries at the register in my local Target. It may well be that the best approach is to specialize in profitable categories such as those outlined above and devote more retail space to hard and soft goods. The grocery arena is well-covered with the current mainstays in most markets and Target should be careful not to lose their way on the 80 percent of their business that non-foods represent.

J. Kent Smith
Guest
7 years 2 months ago

Target’s grocery presence can often look accidental or shoehorned into the store, something you can stumble on accidentally. There’s no differentiation within the store—the same look, feel, presentation as you get for toys, picture frames and others. Although food shopping is probably the most frequent reasons customers go there and brings in the most sales, the department is often positioned off in left field. I think it starts with a statement about Target being serious with grocery in their stores with how its positioned, spaced and presented. Otherwise it just looks like a causal foray.

Ed Rosenbaum
Guest
7 years 2 months ago

Paula has hit the nail on the head with her comments. Certainly Target is a factor. But Target thinks the only competitor is Walmart. They are forgetting the impact of Publix, Trader Joe’s and Whole Foods. So Ms. Dament, keep your network active because you might need it again if/when this shows no improvement.

Sue Patzkowsky
Guest
Sue Patzkowsky
7 years 2 months ago

Target can compete very well with Super Target as it has a full grocery offering. However- they do need to work on out-of-stocks and make sure they have a sufficient variety of branded products. The PFresh format cannot compete with a full grocery store—never will. So if they really want to be in the food business you need to go back and look at your Super Target concept as a way to grow. I don’t see that happening, and therefore they will continue to be stuck in the middle with nowhere to go.

Richard J. George, Ph.D.
Guest
7 years 2 months ago

As I noted in a March RetailWire post, there are several key steps necessary for Target to reinvent it’s grocery business: Create an appealing sensory environment, ramp up the fresh and perishables sections, staff the food side with knowledgeable people, offer a dedicated grocery store entrance and emphasize Target’s private-label offerings. Target’s private-label products are among the best, not only when compared to other food retailers’ offerings, but also compared to national brands.

Target’s biggest opportunity is to take share from Walmart on the grocery side as it did on the non-foods side via its “cheap chic” positioning.

It appears that Anne has the proper pedigree and experience to lead this transformation. However, it will be a significant challenge.

Tony Orlando
Guest
7 years 2 months ago

Target, like other big box stores, is just not going to invest in the departments that would draw in more customers, like high-end perishables (deli-bakery, and custom cut fresh meats), as this would throw their labor factor out of whack. I for one am glad, as this is how we conventional stores survive.

Target can re-organize their product mix, and offer healthier type sections, but everybody has this product and unless they are willing to drop their prices to match Walmart, I don’t see any big growth happening.

George Nielsen
Guest
7 years 2 months ago

Target needs to think fresh convenience store rather than full grocery store. They have to go for the impulse buy rather than a full grocery shop. The “I’m here anyway and I need milk” type of shopper.

Gordon Arnold
Guest
7 years 2 months ago
Target’s track record for placing strategic corporate trusts in the right hands is worrisome on a good day. The selection of an individual with experience and relative success in an affluent market segment’s discretionary spending habits to a world of the upper middle class is going to be a challenge worth watching. Ms. Dament’s ability to slug it out for the lion’s portion of this disappearing economic class’s market share will be tested very quickly. The need to learn this new market and identify and implement solutions for the strengths and needs among the company’s employees may take more time than she has for the immediate successes she needs to shore up sales to recover the profit and revenue losses over the past several years. I see no other segment of the retail industry that is in more distress outside the grocery business. Everybody wants either in or more of the tightest margins with the lowest shelf life and the turnover for both employees and companies is phenomenal from any investment perspective. Even the prepared… Read more »
Ryan Mathews
Guest
7 years 2 months ago

I think the first step is to ask the question whether or not they should really be in a full line business or just focus on specialty foods.

I’m sure Kroger could sell refrigerators, since presumably most of their customers need one, but it isn’t really a viable business model.

As to Anne Dament … time will tell, but I’m not sure she’s picked the right initial targets.

Craig Sundstrom
Guest
7 years 2 months ago

While I certainly wish them all well, and just as certainly am not expert enough to critique the choice of Ms. Dament, I hardly find it encouraging that Mr. Cornell (apparently) has already drawn up the battle plan (and what a plan it is: specialty candy, yogurt, coffee…coffee? really?! …this “reinvention” sounds like a facsimile of Cost Plus), is she going to be following him, or leading Target?

Camille P. Schuster, Ph.D.
Guest
7 years 2 months ago

If Target’s overall strategy is to reinforce their mission of “Expect More, Pay Less” by concentrating on trend and fashion, will that be incorporated into the food area? If not, will Tareget be going in two directions?

RIchard Hernandez
Guest
7 years 2 months ago

I think that Target needs to decide what they want to be when they grow up. Do you want to be a complete shop? Do you want to be a convenience shop? Do you want to be a snack limited assortment shop? Do you want to be Whole Foods or Trader Joe’s?

I shop a Super Target and get an almost complete shop but there are obstacles like out-of-stocks or expired fresh product that stand out. I am hopeful that Ms. Dament can make the right decision for Target to be successful in the grocery business.

Roger Saunders
Guest
7 years 2 months ago

Brian Cornell drove the execution of Safeway’s business at a time that Steven Burd was delivering solid operational and financial improvement at Safeway. Cornell was excellent in taking on two or three challenges, and turning them around in decisive order.

If Anne Dament was a part of that team, look for Target to begin to ramp up their grocery business. She likely has the chops.

With Cornell’s backing, and focus being given to the merchandise line, Target has the best opportunity to begin to move their position forward in this arena, which still delivers nearly 100 trips per year. Based on the Prosper Monthly Consumer Survey, Target Shoppers who used the store most often for their grocery purchases, provide Target with a Net Promoter Score of 44.66%. That compares to total grocers who receive a NPS of 33.84%.

Target Consumer Equity Scoring for Grocery has hit a plateau, and dropped slightly over the past two years. It will be interesting to see moves that Dament puts in place—it’s all upside opportunity for her and Target.

Jim lucas
Guest
Jim lucas
7 years 2 months ago

Interesting to see how Target grapples with these six identified areas as “destination categories.” Equally interesting to see the role of Target own brands across these categories.

vic gallese
Guest
6 years 10 months ago

Target has to understand who its grocery customer is. Note: this may be slightly different than their non-food customer (see Meijer). They need to think holistically—not by category—if they really want a sea change.

Good luck Ms. Dament. Her experiences point to a success!

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