Target groceries missing bull's-eye

- Target established itself as the “cheap chic” brand, but its foray into grocery sales has been a little bit more frumpy.

The leader of Target’s groceries recently left, and some customers have had less than satisfactory reviews of the grocery department.

George John, a professor in the Carlson School of Management at the University of Minnesota, says Target’s size is both its greatest challenge and opportunity.

“The advantage is the whole other side of Target," said John. "Lunds & Byerlys doesn't have that. Hy-Vee doesn’t have that, so the more you can create synergies, you’ll win, and that’s what they were trying to do, and will continue to try to have to do. “

However, Target’s operational history also poses a challenge. Its roughly 40 distribution centers were not created to transport food that can spoil.

“If you’re a grocery-only chain, your distribution centers are going to look different from if you’re a dry goods retailer like Target,” said John. "So, if Target adds grocery, you have this awkward fit from what you’ve optimized for your apparel, electronics, and the rest of it, and what the demands for groceries are, which is much more frequent replacement, much more fresh stuff.”

Target has added food-specific distribution centers. And according to trade publications, Target has been adding special teams to focus on each store’s grocery store.

Phil Lempert, who runs the “SuperMarketGuru” website, said Target initially faced the problem of many of the food departments placed “not in the front of the store, but off to the side, or in the back.”

But Lempert says the new Target stores have better placements.

“It’s still going to have food over here, and tires over there. And for some people, that’s great,” said Lempert.

John suggests, in the end, it will come down to the appeal of the food.

“What was Target’s original stock and trade?" he said. "They were cheap chic. Tar-jay, right?”
 


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