RetailAnalysis
20 March 2017
Target aims to kickstart food reinvention

Target has appointed Jeff Burt as senior vice president grocery, fresh and beverage to advance its food strategy.

Brings extensive food experience from 30-year Kroger career

Burt joins Target from Kroger, where he was most recently the president of the Fred Meyer division, the retailer’s hypermarket operation in the North West. He has spent 30 years at Kroger in a number of leadership positions, including leading its central division, overseeing various merchandise categories, overall merchandising and operations.

A new vision for food has been in development for two years

Developing a new food offer is a priority for Target as part of a broader reinvention of the business. The retailer started to test new ranging and merchandising approaches in late 2015, while last year it pushed ahead with a broader test as part of its LA25 initiative. While several of the new initiatives were expected to form part of a major remodelling program this year, the retailer’s food strategy was under review following the departure of Anne Dament at the end of last year. She had joined the retailer 18 months earlier but some of the changes had failed to drive an improved performance.

Focusing on winning with younger shoppers

This latest appointment is likely to see a brake applied to existing projects, while a new plan to win with food is developed. Broadly, Target is focused on building stronger appeal for its food offer with younger shoppers, and in particular, younger parents. To support this, it has introduced a wider range of natural and organic products, niche brands and better-for-you products.

Target will launch the first store featuring the next generation design in Houston, Texas, later this year. This will provide the vision for the 500 re-imagined stores planned for 2018 and 2019. This will include a separate entrance which will offer easy access to its grocery offer, self-checkout lanes and a dedicated online order pick-up counter.

Retail partnerships could be a way to accelerate change

However, Target may need to take bolder action to effectively win with food and develop it as a key traffic driver for the business. While it is unlikely to introduce service counters and move towards a full-service offer, the retailer will need to better define the role of food within its stores. This may include creating a more differentiated space in-store and building a unique identify for its food offer. While Target has sought to do this internally to date, retail partnerships could be a way to tap into best practice in this area and move more quickly.

Investing $7bn over three-year period to drive transformation

Earlier this month, the retailer revealed plans to invest $7bn in the business over the next three years to accelerate its transformation. While much of this will be focused on digital initiatives, the retailer also plans on remodelling 600 stores. As part of this, Target will reallocate space in store to support digital fulfilment and design backrooms to enable it to grow its ship from store capabilities. It will also introduce a more contemporary look and feel across the store. Price investments will also be critical to building stronger appeal for its food offer.

Read our latest insight report, How Target is tackling retail transformation, to see the areas where it will be investing harder over the next few years and what a future Target could look like.




Stewart Samuel, Program Director, IGD Canada
Based in Canada, Stewart heads up all of IGD's research and coverage on Target. He is also responsible for shaping IGD's research program across North America. Contact Stewart at stewart.samuel@igd.com for further insight on the region.
@Stewart_IGD
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