Posts Tagged 'Brian Cornell'

Is Target’s turnaround on the right track?

A brief comment (below) from RetailWire, regarding Target CEO Brian Cornell’s evaluation of their improved comp sales and operating results. It’s all about the merchandising:

Given his CPG background, I give Mr. Cornell credit for recognizing at the outset that Target’s real niche is “cheap chic” apparel and home goods. This is what the brand was built on, not groceries and commodities. While these categories will continue to be important in-store and online, Target’s destiny doesn’t depend on them. The new brands’ product development didn’t happen overnight, but the strategy is beginning to pay off.


Target to national food brands: Your days may be numbered

I posted a comment in April about Target’s CEO (Brian Cornell) and his intention to reposition the grocery business toward fewer “commodities” and more specialized categories. This week, Target also announced that it will be taking the spotlight off of some of the best-known national brands in the food business as part of this evolution. While Target is overall starting to deliver better results (and that may be the big picture), most RetailWire panelists agreed with my point of view on this one:

This initiative ties to the “curated” approach that Mr. Cornell announced a month ago. It provides a greater focus on categories like snacks, coffee, craft beer, etc. and less attention paid to “commodity” items. My RetailWire comment at the time — that a “Trader Joe’s” approach to the business can undermine Target’s investment in being a destination food store — certainly applies to this news as well.

If Target makes it harder, not easier, for the grocery shopper to find everything on his or her list, doesn’t that signify a retreat from its investment? At the same time, it may represent a chance to reposition the total store away from food and toward the other areas where it aspires to gain share.

Target: An about-face on its grocery strategy?

Brian Cornell has made plenty of changes since joining Target, and his latest is a renewed focus on grocery categories that can position the store away from more “basic” food stores. I express some skepticism on this recent RetailWire post:

All of the categories mentioned by Mr. Cornell (snacks, coffee, craft beer, and so forth) represent a reversal of the “commodity” approach favored by Greg Steinhafel and his team. While a niche approach to the grocery business is more consistent with the Target brand, it may not drive enough volume to justify the massive capital investment and space reallocation devoted to food over the past five years or so. The question is whether a modified “Trader Joe’s” approach will compel Target’s customers to do most of their grocery shopping somewhere else.

Target ends its Canada misadventure

Most RetailWire panelists were surprised last month at the Target annoucement that it is pulling out of Canada…less than two years after opening. I commented that the speed of the decision is a refreshing return to form for Target:

There are well-documented execution issues—pricing, supply chain management and so forth—that don’t need to be rehashed at this point. The biggest takeaway is the speed with which Mr. Cornell pulled the plug on the misfire. Where Target used to be known for a culture of “Speed is Life,” this was replaced over time by a more cautious approach to the business. It’s arguable that the size of the investment deserved more time for a turnaround, but the prospects were so dim (no profit until 2021) that Mr. Cornell’s decision represents a wake-up call to his own organization and to the investor community.

Can Target return to its merchandising roots?

Some recent articles about the new CEO at Target (Brian Cornell) have noted his plan to focus on apparel, home decor and kids’ businesses. For somebody with a CPG background like Mr. Cornell, this is a refreshing approach to a business that lost sight of its key strengths. Here’s a recent RetailWire comment on the topic:

I have always viewed Target’s focus on food and consumables to be a distraction from its core business. Having made the investment in groceries, it’s hard to step back now but the strategy served largely to “commoditize” a company with a distinct brand identity. I’m pleasantly surprised to see Mr. Cornell (the subject of initial skepticism because of his CPG background) focusing on “cheap chic” areas like apparel and home decor.

It was also interesting to note in the WSJ article that Mr. Cornell paid a visit to Bob Ulrich, who was perhaps the most important figure in Target’s history. (The Journal said that Mr. Ulrich stepped back while his protege Gregg Steinhafel took the company in a very different direction.) Bob Ulrich’s re-engagement with the new CEO has some symbolic value at a company trying to move faster while honoring its heritage.

Target finds its new CEO

Target announced this week its first-ever outside hire as CEO. Brian Cornell brings a mix of CPG and retail background to Target, including stints at Pepsico, Sam’s and Michaels. My comment at RetailWire reflects some caution about whether he can fix what really needs fixing at Target. If he can empower his merchants and other members of his team, the appointment should be a win:

Some of the initial reaction I’ve read pushes back on Mr. Cornell’s Pepsi background, ignoring the time he has spent at retailers like Sam’s and Michaels. The real question is whether he can shift the spotlight back onto apparel and home decor — always Target’s “calling card” for brand differentiation — and away from food and consumables. His background raises a caution flag, but with luck the Target board identified somebody with the leadership and strategic skills that the company needs right now.