Target’s Grocery Mess

The discount retailer is having trouble getting customers to buy its fresh meat, fruit and veggies.

August 16, 2016

TUALATIN, Ore. – Target Corp. has been, well, off-target with its grocery section, as much of the fresh meat and produce has been spoiling before shoppers buy it, The Wall Street Journal reports. Perishable foods are generally huge traffic drivers at supermarkets, but for Target, having fresh produce and meats has meant a bigger loss on its bottom line. That coupled with fewer trips and smaller basket sizes has spelled potential disaster for Target.

“We have seen some trip erosion with guests coming in for that fill-in trip,” said CEO Brian Cornell during a May conference call. Cornell has made a concentrated effort to re-invigorate the grocery section, which brings in a fifth of the chain’s revenues. But despite more gluten-free and organic items and a better designed grocery part, overall sales at existing stores are likely to be down 2% during the second quarter.

The grocery section has been a problem for Target for a while. “We sit in the middle,” said COO John Mulligan more than a year ago. “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.”

Part of the problem is that the company’s supply chain isn’t equipped to move short-life items like perishables. “We know we need to operate the food business differently and it’s a much bigger task than simply reconfiguring part of the store,” a spokeswoman for Target said. “We are still in the early stages of our food repositioning effort, [which] includes evaluating how we get fresher foods to our guests faster and finding ways to better leverage our distribution centers and partners.”

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