grocery business in a quest to become America’s grocer.
The chain has been meeting with its shoppers—called guests—in
focus groups and even in their homes. It has repackaged and relaunched
its flagship Market Pantry private label line. Target buyers prowl trade
show floors looking for the latest trends and cutting-edge unique products. Target regularly meets with its manufacturing partners and offers
useful critiques when it comes to packaging, ingredients and tastes.
It even works with them to develop unique flavors to be sold initially
exclusively in its stores.
However, the biggest change is that Target is changing its assortment.
It is stocking more local and craft products and has stepped up to the
plate when it comes to expanding organics. Target is also increasing
the quantity and quality of its fresh foods offerings. To do so, Target
has hired perishables experts from leading supermarket chains, such as
Safeway, and reset its grocery departments to make perishables front-and-center and easier to shop.
This can best be seen in Los Angeles where Target has taken 50 of the
top enhancements it has been testing across the country and put them
together under one roof in 25 stores, in a pilot project dubbed LA25.
“Our goal is to see how we can improve the guest experience and
grow sales when all of these elements are working together,” Brian
Cornell, chairman and CEO of Minneapolis-based Target Corp., said at
a Thomson Reuters Streetevents Financial Community Meeting in early
“Grocery is a critical component that we are leveraging as part of
Target’s overall strategy,” Anne Dement, senior vice president, mer-
chandising for grocery, at Target, tells Grocery Headquarters in an
exclusive interview. A 25-year retail veteran, Dement has held key
positions at Kowalski’s Markets, Supervalu, Safeway and PetSmart over
the course of her career. “Today, grocery is our biggest individual unit
and it accounts for one-quarter of our sales, but it represents more than
half of our total transactions, meaning that more than half of our trans-
actions have a grocery item in the basket.”
During his Thomson Reuters talk Cornell noted, “Last year, we
promised we’d redefine our position in food. While our guests cer-
tainly have told us they appreciate the convenience of having fresh
foods, we also heard that too often they were leaving underwhelmed
As a result, company officials realized that repositioning grocery
would be a bigger task than just reconfiguring a few aisles.
“Looking across categories, we found out our market share was out
of balance,” Cornell said. “We were strongest in the categories with the
least growth potential. Too much of our assortment is in the center of
the store while the true growth opportunities exist around the perime-
ter. We found we were touching product far too often, driving up opera-
tional costs and complicating our out-of-stock position.”
To build share and please its guests, Target is improving its perish-
ables—starting with produce.
“We are doubling down on food fundamentals,” Cornell said. “We
know, given where we are starting, given where we are today, we’ve got
lots of room for growth and while this won’t start with a big, one-time
reset, a one, big-time reveal, we think we will transform virtually every
element of the business.
“This year you’ll see us working to earn more credit for organics and
dramatically improving freshness across the assortment,” Cornell said.
“We are moving through the assortment item by item, starting in the