Tar­get aim­ing for shop­pers’ gro­cery lists with ex­pan­sion

Style-minded dis­counter has sights set on ‘one-stop’ model with ren­o­va­tion of 340 stores

Austin American-Statesman - - BUSINESS - By San­dra Pedicini

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.”

Ri­cardo Ramirez Buxeda The Or­landO Sen­Tinel

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.

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