Target aiming for shoppers’ grocery lists with expansion
Style-minded discounter has sights set on ‘one-stop’ model with renovation of 340 stores
ORLANDO, Fla. — At Target, groceries are in; gardening is out.
Target Corp., the Minneapolis-based discounter known for trendy clothes and stylish home decor, is now beefing up its stores’ supermarket aisles. The chain plans to spend $1 billion on remodeling 340 of its stores this year.
Target is adding meat, fresh fruits and vegetables, and packaged baked goods such as pies. Target says it’s feeding the demands of its customers, who want increased convenience.
Other changes will take place as well: Beauty sections get a makeover with softer lighting and curved fixtures; the home sections will display decor in a way that allows shoppers to more easily envision them in their homes; and video games, now locked away in cases, will be in the open, where customers can touch them.
Target is also phasing out all its garden sections, saying those areas are no longer profitable. A few gardening items will still be sold in other areas of the stores after September,
when the garden sections are due to have been eliminated.
In the stores getting remodeled, new layouts will devote about 10,000 square feet to food, expanding existing grocery sections by 50 to 200 percent. The new sections are still dwarfed by those in SuperTargets, which have about 22,000 square feet for food sales.
Target has long offered basics such as macaroni and cheese and soda. It also has its own food brands, Archer Farms and Market Pantry, for staples such as eggs and maple syrup.
Adding meat, fruits and vegetables will lure existing customers into stores more frequently, said Mark Hamstra, an editor at trade magazine Supermarket News. “They don’t need new clothes from Target once or twice a week,” he said.
Kristin Butler of Altamonte Springs, Fla., said she can’t wait for the expanded grocery section. Last week, she stopped at Target for coloring books and other toys, and ventured into the grocery aisles for milk, crackers and juice.
“It’s just easier for a one-stop shop,” said Butler, 28, the mother of three young boys. “If I could get what I need here, I would be all about that.”
Target is not the only retailer embracing the grocery-centric strategy. Drugstore chain CVS is doubling the number of groceries on its shelves in about 3,000 of its stores.
Whereas drugstores’ sections will remain places people make quick stops, Hamstra said, some shoppers will likely begin doing the majority of their grocery shopping at the remodeled Targets.
Still, Target faces some challenges, Hamstra said. Groceries don’t generate as much profit as general merchandise, partly because they have to be replaced so often. The heavy turnover of produce and meat requires more work — and often, more employees — to keep the shelves stocked and neat.
Of course, Target has a number of competitors in food sales, including traditional supermarkets. There’s also Wal-Mart Stores Inc., which Hamstra said now accounts for about 20 percent of grocery sales nationwide.
Wal-Mart was No. 1 on Supermarket News’ list of the 75 largest food retailers last year. Target didn’t make the list.
Target’s sales in established stores lagged behind Wal-Mart’s during much of the recession as customers stayed away from the trendier apparel and looked for rock-bottom prices. That trend, though, has reversed recently.
Target’s niche, Hamstra said, will be “basically the same shopper they (already) appeal to … someone who wants to save money but is a little bit more concerned about style, fashion, trends than the typical Wal-Mart shopper.”
Target already offers some groceries, but the retailer is planning an expansion at 340 stores, taking the food offerings beyond pantry staples, with baked goods and fruits and vegetables.