I was in a recently in a Target Pfresh and noticed they did not have any meat or produce in their grocery department. Usually we see this when Target has been hopelessly beaten by some of our premier grocers such as HEB or Wegmans. I don’t follow Target’s stock price or financial results. Maybe they are doing great financially, but on the sales floor I see trouble. I even like shopping at Target from time to time but not for food (except their 99 cent per pound boneless turkey breast they sell a few times a year)
Target never has been good at grocery. They have always executed like an amateur. Sales in a SuperTarget are usually about 40% of what we see at the nearest Walmart Supercenter. Their sales area is only about 60% of that of Walmart. The Pfresh stores even smaller, about 40% compared to Walmart. Grocery comparable sales in Walmart are routinely over 60%. At Target perhaps 35% (Rx is out now that its owned by CVS). A Walmart that does $100 million in sales per year is now commonplace. A Target that does $100 million is considered an elite performer.
Target failed at pharmacy and was forced to sell off the business to CVS. Target tried to open stores in Canada but quickly failed. They opened in failed locations with zero name recognition and no knowledge of the Canadian market. Target was ineffectual from day one in Canada.
Target appears to have lowered their hiring standards. I’m seeing more Walmart-esque type employees with little regard for personal appearance and hygiene. Once those red shirts have faded to pink, it’s time to replace them. It’s normal to see the parking lot littered with shopping carts.
Target is last to implement new technology. They have just recently added self-checkouts. They never got to 24 hours. Never got to smaller markets. Never got into fuel. Never offered any compelling perimeter departments. On a positive note I’m impressed with their RedCard that takes off 5% at the checkout. Also their urban downtown or express stores seem to be doing well.
Who came up with the idea to put grocery 250 feet away from the entrance at the Pfresh stores? Now it’s too late. Target would have tear down and rebuild to do it right. Target is always far down the list in market share in any given market. Expect in Minneapolis where they were given a free ride due to the ineffectiveness of Super Valu and the failure of Rainbow.
Target always seems to dive into controversy. Whether it be who they donate money to, their metro-sexual bathroom policy, or hiring senior executives to please the Social Justice Warriors rather than investors. Instead of changing course, Target makes the same mistakes by hiring another person with bad hair and a briefcase to cure their ills.
Meijer and Hy-Vee have cleverly decided to enter the Minneapolis market, Targets home base. Why not? It’s dominated by two ineffectual grocery retailers – Super Valu and Target. Wow, that is a lot of low hanging market share fruit to pick. In just a few years, forward thinking chains like Meijer could make Target grocery redundant by destroying them in their home town. I could be wrong (but I’m not), but Target’s grocery could be a casualty within the next decade.