Target wants to carve a niche within the grocery segment

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Target wants to carve a niche within the grocery segment

By Marianne Wilson - 09/16/2019
When it comes to food and beverages, Target doesn’t want its business to be merely functional and transactional.

“Our goal in grocery is to be Target,” Stephanie Lundquist, executive VP and president of food and beverage, Target, said in the opening keynote at the second annual Groceryshop event, which kicked off Sunday in Las Vegas. “Food and beverage should be part of the magic Target experience.”

Noting that Target’s grocery business has lacked a point of view, Lundquist said food and beverage should reflect the same type of innovation and inspiration that is evident across the retailer’s other categories. To that end, Target is launching a new, private grocery brand. Good & Gather, which, when fully rolled out, will be Target’s largest owned brand to date.

“In building Good & Gather we knew we had to start with a blank slate,” said Lundquist.

The rollout of the brand is being executed in several phases. The first part, which encompasses some 650 products began to hit the stores on Sunday. Another 1,000 products will be added in spring. A total of more than 2,000 items across every food category will be featured by the end of 2020. (With the rollout of Good & Gather Target will start the phase out of its Archer Farms and Simply Balanced grocery brands and reduce its Market Pantry line.)

The launch of Good & Gather comes as grocery is playing an increasingly important role in Target’s overall business. The retailer has racked up eight straight quarters of same-store sales growth and seven straight quarters of market-share growth in the category. Food and beverage now accounts for one-fifth of Target’s annual sales.

“Food and beverage is playing an outsized role in our success,” Lundquist said.

The launch is also part of Target’s broader initiative to expand its in-house or owned brands. In an audience that included many CPG representatives from national brands, Lundquist alluded to the impact that its owned brands have had on business overall.

“Our experience has been that new owned brands lift entire categories,” she said.