Skip to content
Link copied to clipboard

Target to offer perishables

All you need is shampoo - or so you say. You go to Target, ignore the giant red shopping carts at the entrance, and dart to the health and beauty aisle, determined to stay focused.

All you need is shampoo - or so you say.

You go to Target, ignore the giant red shopping carts at the entrance, and dart to the health and beauty aisle, determined to stay focused.

The next thing you know, you're at the checkout juggling a snowman doormat, a Captain America kiddie T-shirt, a box of Cheerios, and a stash of paper towels big enough for a bomb shelter.

You are Target's dream customer, and there are a lot of you out there. But now the Minnesota retailer wants you to drop by more often, so it has come up with new bait it's testing across the Philadelphia area before launching it nationwide.

This month, Target Corp. is completing renovations at most of its 31 stores in the eight-county area to include, for the first time, fresh meat, produce, baked goods, and other perishables.

The maneuver comes in an already-crowded supermarket region, where grocery chains are struggling to keep the customers they have.

Industry observers say Target's perishable-food strategy seeks to capitalize on consumer appetites for low prices in tough times, as well as the popularity of food sold at other, traditionally nonfood retailers.

But it also seeks to attract more bodies to stores more frequently, which boosts sales by bleeding the competition.

"They're probably saying, 'Well, we can't sell any more jeans. Let's see, maybe we can get people to buy the hamburger from us,' " said John Stanton, chairman of the food-marketing department at St. Joseph's University and an industry consultant. "The frequency of shopping for food is quite higher than the frequency for buying jeans or other things in the store."

Perishables give customers one more reason to make a Target run - something Wal-Mart, drugstores, and others already have found.

"If I give you more choices," the thinking goes, "then you're probably going to buy more," Stanton said.

Expanded Target stores will be good for shoppers by stoking competition, which leads to lower food prices. It is aggravating for supermarket chains, though.

Years ago, supermarkets took aim at florists, bakeries, and local pharmacies by including such items in their stores. Now, nonfood retailers are doing the same sort of thing to supermarkets, said Jeff Metzger, publisher of Food Trade News.

"They were the hunters," Metzger said. "Now, they're the hunted."

The new Target stores are designed in what the company calls a "P Fresh" format - a cross between Target's general-merchandise stores, which already have some grocery aisles, and much larger SuperTargets, which contain full-size supermarkets.

Locally, there are no SuperTargets, which are 186,000 square feet. All 31 local Targets built since 1997 are about 127,000 square feet. The new P-Fresh designs are 135,000 square feet to fit in more shelves, as well as refrigerators with small displays of packaged steaks, ready-to-bake chickens, individually wrapped bell peppers - that sort of thing.

The only local stores not being redeveloped in this way are in Cheltenham and on Bustleton Avenue in Northeast Philadelphia, where the company encountered use restrictions, said Jill Hornbacher, spokeswoman at Target's corporate headquarters in Minneapolis.

The reason for test-driving the concept fully in the Philadelphia region comes down to this: "Its total sales and food sales exceed company averages," Hornbacher said. In other words, a lot of locals already buy food at Target.

The company's expansion is ambitious, given that many retail chains are squeezed for cash and have pulled back on capital projects. Target, however, announced the 29 store renovations in August and will be finished with them in a matter of days.

A new Target opening today at Springfield Mall in Delaware County showcases the new format with 24-foot-long refrigerated cases containing individually wrapped vegetables, chopped lettuce, and other grab-and-go food.

Petite sirloin steak sells for $6.99 per pound, $5.99 on sale. Ground chuck is $1.99 per pound with more fat, $3.99 with less fat.

"Our pricing is going to be very competitive with other retailers out there," said Dave Gardner, general manager at Springfield.

The new mall store was built from scratch in a vacant anchor spot where John Wanamaker and later Strawbridge's operated department stores. It is Target's first mall location in the region.

Eager to grab more customers itself, Genuardi's plans this weekend to launch an "Everyday Low Price" campaign to drop prices on thousands of items for the long haul, rather than focusing on weekly sale items.

The chain, owned by California-based Safeway Inc., has been losing market share to ShopRite, Wal-Mart, Giant, and others in the area.

"One of the reasons we've seen market share slip a little bit is based on the amount of competition that's come into the area," said Steve Neibergall, Safeway Eastern Division president, overseeing all 37 Genuardi's in the region.

Food-retail square footage has grown more in this region than in most other markets in the country, he said.

By cutting prices up to 25 percent, Genuardi's will take lower profits if it means more customers.

"If we don't respond to the needs of our consumers," Neibergall said, "then we'll be one of those that won't be, ultimately, in the marketplace."