Tuesday, October 20, 2015

Target delaying food overhaul until 2017

The Minneapolis Star Tribune reported earlier this month that Target has pushed back the rollout of its food overhaul from 2016 to 2017, saying they need more time to hash out and test ideas. The company's goal is to make its grocery department more of a destination, rather than an afterthought.

The process has already begun, with small tests taking place in several stores around the country. In these select stores, shoppers see a new kiosk on wheels that displays food items and accessories. A store in Minneapolis is one of 450 Target stores with a bigger assortment of gluten-free, organic and healthier items.

The same Minneapolis store is also testing a larger selection of bulk nuts, trail mixes and grains in self-service bins, with produce laid out in wood-paneled receptacles and wicker barrels promoting a fresh-from-the-farm look.

According to the Star Tribune story, analysts have tracked a 49 percent increase in organic items offered at Target in the last year, including private label and brand-name items. Sean Naughton, a retail analyst for Piper Jaffray & Co. noted that Target's brand-name organic items are often sold for less than at Whole Foods. He explained that Target can afford to sell the items for less since the margins it gets on its home goods and apparel "allows them to be competitive on traffic-driving categories like food."

"It's a nice advantage they have compared to others," said Naughton.

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