Target Seeks to Revamp Its Struggling Grocery Section
New leadership will oversee food brands, while the chain also expands next-day delivery to more cities.
Everyone loves Target, but not everyone seems to love the discount chain's grocery business. As Fortune reports, food accounts for approximately 20 percent of Target's total sales, but its food business is still suffering from steep competition from other grocers such as Wal-Mart, Kroger, and Whole Foods Market. Target reported its food and beverage sales fell in its first fiscal quarter this year. But Target isn't taking the issue lying down; instead, it's making a few big and bold changes to its grocery business.
This week, Target announced it has hired two new senior executives to retool the grocery business. Liz Nordlie, who has 20 years of experience with General Mills, and Mark Kenny, who comes from Wal-Mart as its head of house brands in deli and bakery, will be asked to rethink Target's private label brands and prepared foods. Specifically, "Nordlie will be vice president of product design and development in food and beverage at Target and home in on Target's private label brands in food, which include Archer Farms and Market Pantry," Fortune reports, while Kenny will "oversee meat, seafood, deli, bakery, and prepared foods."
"We have been making positive progress with our assortment, presentation, and operations in food and beverage this year," Mark Tritton, Target's executive vice president and chief merchandising officer, said in a statement, before adding that Nordlie and Kenny will help the brand "go even further, faster, delivering both an experience and assortment that's uniquely Target."
Nordlie and Kenny follow in the footsteps of Jeff Burt—formerly of Kroger—who was hired by Target a few months ago to head the company's grocery business.
But these new hires—and their big responsibilities—aren't the only changes coming to Target. The company announced today that is expanding its next-day delivery service. Once only available in Minneapolis, where Target is headquartered, now the next-day delivery service, dubbed Restock, will be available to customers in Denver, Colorado and the Dallas-Fort Worth area in Texas, TechCrunch reports.
Restock is Target's way of competing with Amazon's Prime Pantry. They're similar services, in that you can fill one box with up to 45 pounds of goods and ship them to your home for a flat fee. However, Target's Restock charges just $4.99 per box, while Amazon charges $5.99, and you don't have to have a membership to use the service.
Target has also purchased Grand Junction, a transportation technology company, so that it can one day roll out same-day delivery options, according to TechCrunch.