Subject category:
Strategy and General Management
Published by:
Amity Research Centers
Length: 11 pages
Data source: Published sources
Topics:
Target; SuperTarget; Groceries; Brian Cornell; CEO; Challenges; Competition; USA; Walmart; Amazon; Identity crisis; Traffic; Sales; Market; Strategy
Abstract
Target, one of the largest retailers in the US, started its grocery segment in the year 1995 with high hope to add value to its bottom line. Called SuperTarget, the stores continually increased their products through its Archer Farms, P-Fresh and Simply Balanced lines. Among other laurels, Target was also one of the first retailers in the country to have USDA certified-organic produce. Its main aim was to give shoppers a 'one-stop, no-hassle experience through its motto of 'Eat Well. Pay Less'. The grocery market, however, had big players such as Wal-Mart, niche players like Whole Foods and small dollar stores that offered inexpensive groceries. Amidst this crowded market, Target found its grocery arm struggling. In 2014, Target hired Brian Cornell (Cornell), who among other responsibilities, had to reinvigorate the grocery business as well. Cornell's strategies entailed staff changes, fresh store designs and the addition of gluten-free foods, among others. Yet, the performance of Target's grocery arm proved dismal as it reported comparable-store sales drop in Q2 2016. The retailer also lowered its guidance for the remaining two quarters as it expected a further drop of 2% in sales. Analysts pointed out several reasons such as identity crisis, stiff competition, less offerings and declining footfalls for the lacklustre performance of Target's groceries. Some even called for a shutdown of the non-performing segment. Amid such an environment, could Target re-energise its grocery business or was it dying a slow, yet inevitable death?
About
Abstract
Target, one of the largest retailers in the US, started its grocery segment in the year 1995 with high hope to add value to its bottom line. Called SuperTarget, the stores continually increased their products through its Archer Farms, P-Fresh and Simply Balanced lines. Among other laurels, Target was also one of the first retailers in the country to have USDA certified-organic produce. Its main aim was to give shoppers a 'one-stop, no-hassle experience through its motto of 'Eat Well. Pay Less'. The grocery market, however, had big players such as Wal-Mart, niche players like Whole Foods and small dollar stores that offered inexpensive groceries. Amidst this crowded market, Target found its grocery arm struggling. In 2014, Target hired Brian Cornell (Cornell), who among other responsibilities, had to reinvigorate the grocery business as well. Cornell's strategies entailed staff changes, fresh store designs and the addition of gluten-free foods, among others. Yet, the performance of Target's grocery arm proved dismal as it reported comparable-store sales drop in Q2 2016. The retailer also lowered its guidance for the remaining two quarters as it expected a further drop of 2% in sales. Analysts pointed out several reasons such as identity crisis, stiff competition, less offerings and declining footfalls for the lacklustre performance of Target's groceries. Some even called for a shutdown of the non-performing segment. Amid such an environment, could Target re-energise its grocery business or was it dying a slow, yet inevitable death?