Tuesday, August 16, 2016

Target having trouble selling groceries...

Consumerist reports that Target is having trouble in the grocery department. Despite the fact that Target sells around $18.5 billion in groceries a year, that's only around one-fifth of the company’s total annual revenue. Meanwhile, more than half of Walmart’s yearly revenue comes from groceries.

The Wall Street Journal recently took a look at Target’s fresh food woes and its efforts to course correct. The biggest reason for the grocery sales slump seems to be because shoppers just don't visit that frequently. Meaning: while Target has many regular shoppers, they may not be regular enough to keep fresh meat and vegetables from spoiling.One Target customer explains to the Journal that she shops at the store once or twice a month to purchase things like cleaning supplies and home décor, and she may pick up an odd food item here or there, but adds that “I don’t go out of my way to do grocery shopping at Target because there are so many other specialty stores.”

Data from Nielsen shows that shoppers favor traditional groceries over big box retailers regardless of whether they are buying a week’s worth of groceries or just doing some quick shopping to fill in the gaps. Meanwhile, it appears that Costco and other wholesale clubs are increasingly becoming a destination for shoppers looking to stock up their pantry, fridge, and freezer with food.

In 2015, Target’s chief operating officer acknowledged this outsider status: “We’re not really special and we’re not a full grocery. And so we’re sitting in the middle of no man’s land.”


TPA200 said...

Target should of stuck to the outdoor garden shop area and forgo the grocery section.
Living in Florida, the garden shop was the best! Miss it and its "garden specialists"
to this day.

Critifur said...

I would use the Target grocery department more, but they are an out of the way destination.

George Wolfson said...

We are regular (at least once a week) Target shoppers but depend on Target less and less for our groceries. The reasons are their diminishing variety of items in food categories (fewer jelly choices, fewer cookie choices, etc.) and their over-dependence on house brands over national brands.

Unknown said...

I am a frequent Target shopper (more than once a week) and I would like to buy some of the groceries there - but our closest store is so often out of almost everything I need!
Let's say I come on Friday afternoon - they are out of eggs, cherries, no ground chicken, some shelves in the freezer section are empty, no Archer Farms take-and-bake bread and the list goes on and on. When I ask a team member when is the next grocery delivery - it's after the week-end - are you kidding me? What normal store operates that way? Why would you not have anything being delivered over the week-end when it is the busiest time at the store? Does not make sense at all . And Target is surprised the grocery sales are not satisfactory.
Maybe, just maybe, it is my store - it is located on El Camino Real and it always looks like mobs went through it.

Barbara said...

When I had a Super Target 6 miles from me, I shopped for groceries there weekly. They had a great grocery department, and I like a lot of the Archer Farms brands. Their produce was not always the best though, so I got that at the Farmers Market and Sprouts. However they closed the store right next to me for poor performance a few months ago. Now, the closest Super Target is 15 miles away and I don't get out that way often. That store has a good selection and is always well stocked, it's just out of my way. When I am in that part of town I do shop there and am never disappointed, but I sure miss the one that was so close to me.

Target Addict said...

TPA200: I miss Target's Garden Center, too!
George Wolfson: totally agree on their dependence on house brands, as well as specialty brands like Beekmans. They need a better mix of house/national brands.
Unknown: by chance is your store the Santa Clara one? If so, I agree: I was there last month and it was a mess!

As for me: I don't do my regular grocery shopping at Target BUT when I happen to be there and know I need staples (like chicken broth, yogurt, bananas, etc.) I pick them up there. They are inconsistent on their offerings, tho. Case in point: recently I was pleasantly surprised to find they carried fresh arugula....only to find the next week (when I looked for it) that they were out (or no longer carried it).

R. said...

I do my main grocery shop at WInco and Costco, but I go to Target about every other week for household or kid stuff, and I pick up food there probably every trip - however I'm often frustrated by how they don't have ANYTHING in stock. I'm a Cartwheel addict (I'm at nearly $600 in savings and I've only been doing it for a little over a year) and easily 70% of the deals I add are not carried in my store. Bummer. I'd buy more if they had it! I also buy speciality stuff at Target (Annie's, Earth's Best) whereas when I'm at Winco my kids get to make do with store brand snacks and goodies :p

I will say I'm definitely coming in less now that the CVS transition is final. I will NEVER get over how they got rid of ClearRX. So maddening. I used to go way out of my way to go to Target because I could get our RX's (and earn that lovely discount coupon), about a week's groceries, and household basics... now it's like I get the basics and 2 grocery items maybe.

Unknown said...

@Target Addict Yes, the store on El Camino is in Santa Clara, and it happens to be just 5mins from my house, really convenient to make frequent trips. They used to carry interesting products from their brands (Archer farms, Simply balanced and even Market Pantry) but lately I noticed a switch towards big national brands or overpriced/overhyped brands.

As a budget consumer (and a Cartwheel/coupon user) I keep an eye for a good deal. Their fresh meat selection on occasion has discount stickers for the items with a close expiration date.

Another deterrents - sale signs/tags are so often off (remaining from last week sale, no sale signs at all); expired products (yogurt section is the worst) - and yes, I told their grocery team members, told their guest services. Always double-checking everything now.

Lack of grocery items in-stores definitely shows a broken supply chain, how is it possible in the age of everything automated, difficult to comprehend.

Well, there is always a Sprouts next door and a farmer's market.

Target Addict said...

Unknown: good point about checking labels! I always check expiration dates at Target, although my local store seems to do a good job of pulling expired ones. They have to, because we have at least a couple of 'blackouts' (due to the heat) each summer and then they pull ALL refrigerated/frozen items and trash them.

And R: I don't use Target's pharmacy, so I didn't realize they got rid of the award-winning ClearRX system. How sad! And a bad move on CVS' part, too, as they could have used ClearRX as a clever marketing tool by rolling it out to their CVS stores. Talk about a wasted opportunity!