Becky YerakChicago Tribune
Target Corp. just planted a bigger bull's eye on the backs of the nation's grocery store chains.
The Minneapolis-based discount chain said last week it will more than double its food offerings in its new and remodeled general merchandise stores.
For the year ending Jan. 29, Target had 1,308 stores. Of those, 136 were Super Target stores, which already include a full-scale supermarket, and 1,172 were Target general merchandise stores.
Going forward, it'll be harder to distinguish between the two formats.
Last week, during a conference call to discuss second-quarter financial results, Target divulged plans to beef up its offerings of so-called consumables and commodities, which drive shoppers into stores more frequently.
"In selected discount stores, where a full remodeling isn't currently scheduled, we're adding refrigerated coolers" and more dry goods, Target President Gregg Steinhafel said. "By the end of this year, we expect nearly half of our stores to reflect these updates."
Ah yes, Target attempting to compete with the monster Wal*Mart Supercenter. Unfortunately, the margin and scrap on produce and dairy is a lose-lose situation in lower traffic areas, hence it will be tough for them to all convert without losing money. I think a better strategy for raking in money would be for Target to go international.
ReplyDeleteHave you ever been to a Target with sushi? Or better yet a multi-level Target with a separate elevator that carries your cart to the next level? I am afraid to brave Target sushi quite honestly, and even more afraid to attempt putting my cart on the scary looking cart escalator. But the installation of the Starbucks throughout all the remodels is quite nice!
~Carrie =)
Carrie: I hope that they keep their grocery selections in non-SuperTargets to dry goods, frozen foods and milk. That would be the best chance of success. Produce just doesn't work without a full grocery section, same with meats.
ReplyDeleteFor me, SuperTarget's full grocery section doesn't cut it. I love the idea that they have a wide variety of unique products that you can't find everywhere, like Pizzeria Uno pizzas, Chessecake Factory and Toll House baked goods, Jelly belly candies, Jones sodas, and a very nice wine section.
But there's not a lot of good housekeeping going on, especially on the typical gocery items at the one closest to me in Durham, NC. For example, the flour I bought at SuperTarget was stale and messed up some cakes my mom was baking.
I agree with your idea that Target should go international instead. They'd be a hit in Canada, and I think Western Europe would like them as well.
I've seen both the SuperTargets with the sushi (looked okay, believe it or not) and I've seen multilevel stores with the cart escalators, though I've never seen anyone use those things.
The one in Springfield, Va. is in a converted Montgomery Ward and has two levels, while the one at North Hills in Raleigh, NC, is next to a parking garage and uses the cart escalators outside.
When I wrote a post for Remembering Retail explaining why Wal-Mart won't be going the way of Ames, Bradlees, or Caldor anytime soon (Reposted on P.U.), I mentioned Target and its supercenter push. Another retailphile, when responding to my post, wrote "Target is clearly ambivalent about food and could easily cut the food space in many stores to stock something else." I knew he was wrong on this because the new store Target opened in West Hollywood a year ago had a very large food section with coolers and freezers (hadn't seen that before) and also because SuperTargets are being deployed in the Phoenix suburbs. By the by, the West Hollywood store doesn't have meat, produce, or bakery, so I don't think they'll offer those items outside of SuperTarget units.
ReplyDeleteYes, food is a low-margin business, and Target is new to this game so you might encounter stale flour and other snafus, but no one is ever going to go to Target for food - the point is that it's convenient for people to get food while shopping at Target, so the company might as well capture a chunk of that business...despite what some on Remembering Retail think, food has been good for Wal-Mart, that's why the company continues to build Supercenters and Neighborhood Markets (many new Markets have opened in Phoenix recently). Food will be good for Target too, but this move is another blow for the supermarket chains.
Speaking of Remembering Retail, I've enjoyed the flurry of posts that came after I posted links to my posts detailing the exchange Michael Meckler, you, and I had about Marshall Field's. I wrote "I think the subject's open to a lot of debate, and there's no reason why the debate can't continue here." Apparently a lot of people agreed! Some of the comments are better informed than others, and I see you've weighed in with a few good observations. I haven't weighed in because I think my posts describe my position well enough. Although I wish Field's wiould live on, I think Federated will dump the name, maybe not next year, but soon.
The arguments some made that the rebranding will cost more than it's worth aren't based on reality - it won't cost that much to put a new sign on these buildings, and Macy's is already a presence in many May markets, so Federated won't have to spend a lot to "introduce" Macy's to some cities. If people think Federated is going to extensively renovate the May stores, they must not realize that they're already very similar. If you blindfolded a person and took them to one of these stores, they'd be hard pressed to say if it was a Macy's or a May regional store once the blindfold came off!
Carrie: Don't fear the cart escalator. The Target I usually shop at is a two-level store in the Eagle Rock Plaza mall (a former Montgomery Ward), and I've used them with no problem...all the other shoppers use them too, without tragedy.
We certainly got them talking, didn't we?
ReplyDeleteFood is definately placed for convenience at Target, and I can see it being a major growth area for them, as an alternative to Wal-Mart if nothing else.
From a logic standpoint, this Federated rebranding will be a smart move. I just pray they don't lessen their comittment to the smaller markets like I figure they will.
Ther's one guy on Remebering Retail that's getting some kind of perverse pleasure out of the death of Marshall Field's. That's sad on so many different levels.
Mitch--I've posted a comment on your re-post about your post for Remebering Retail (woah that's a tongue-twister!)
ReplyDeleteTarget is indeed a little ambivalent on food...I think they want to "test the waters" before they roll out a full-fledged food statement. Definitley not a top priority, when hip new trends with higher margins keep stopping under the radar....
More commentary on the topic posted in my commentary on the topic on your page. (So redundant...shouldn't go out drinking and then post...it encourages redundancy!!!)
~Carrie =)
Carrie's comments on P.U. are very well thought out. I agree with her notion that ultimately quality will win over price, and also with the notion that, while impressive, Wal-Mart's greed will kill its sucess.
ReplyDeleteWell done :-)