Target’s problems with food retailing

Today’s Retail Wire has a discussion about Target vs. Walmart in the grocery business, triggered by an article in the St. Paul Pioneer Press. Here’s what I have to say on the subject:

A timely subject considering that the front cover of yesterday’s Target sale tab featured Archer Farms products, with the emphasis on price more than ever. Target has a couple of interrelated problems executing its food strategy:

1. Its mix of store locations do not have anything approaching the critical mass of Walmart’s supercenters. As long as a large number of Target stores are regular-format or Greatland stores (instead of Super Targets) they appear less committed to the business than Walmart.

2. Walmart has the unbeatable perception of being the price leader on “necessities,” including food, HBA and other categories requiring frequent trips to the store. Target continues to define itself as the go-to discount store for fashionable housewares and cheap-chic fashion. This may the right brand positioning for Target but doesn’t help it in the market share battle over food.

3. Archer Farms has become the “face” of Target’s food business, along with specialty products like Choxies. “Aspirational” may be true to Target’s overall brand position but is wrong for the times.

4. Target’s in-stock execution seems to be slipping, and not just in food…but this is the last place where regular shoppers want to find empty shelves.

The disconnect between Walmart’s and Targets’ approaches to the grocery business goes a long way toward explaining the sharp contrast in comp sales over the past year.

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