The Target executive tasked with turning around the retailer’s so-so grocery sales is stepping down after less than two years on the job.
The Minneapolis Star-Tribune reports that Anne Dament, Target’s senior vice president of grocery merchandising, is making her exit only 18 months after being a marquee hire by then-new CEO Brian Cornell.
When Cornell took over the reins as top exec in 2014, one of his goals was to reinvent Target’s grocery business, which makes sense when you look at his background at Safeway, PepsiCo, and Sam’s Club. Dament had been a colleague of Cornell’s at Safeway.
While the retailer has long dabbled in fresh food, first with full-on grocery sections in Super Target stores and then with smaller-format supermarkets in its regular outlets, the company had never made a full-on commitment to becoming a competitor to traditional grocery chains.
At the same time, Walmart emerged as a major player in the supermarket business. There is also additional competition from newer specialty chains and existing brands that have improved their offerings to keep up with changing tastes.
“We’re not really special and we’re not a full grocery,” Target’s chief operating officer admitted in 2015. “And so we’re sitting in the middle of no man’s land.”
Why doesn’t Target just give up on groceries? After all, fresh food can be a hassle — spoilage, increased shipping and storage costs, thinner profit margins — but it can also mean increased foot traffic, which is incredibly important for a retailer trying to compete with Amazon and other online shopping options.
Need milk? Target has that — oh, and they also have that bathmat you’d been meaning to buy. It goes the other way as well: You’re buying that bathmat, so you might as well pick up some groceries and save a trip to another store, right? A recent Nielsen study showed that, regardless of the primary reason for going to a supermarket, fresh food ended up in the shopper’s basket 27% of the time.
But analysts say Target has yet to convince enough shoppers that they should be picking up groceries for the week.
“They’re just in a really tough spot,” Brian Yarbrough, an analyst with Edward Jones, tells the Star-Tribune. “They don’t have enough groceries to drive people to the store regularly. Groceries for Target never turned out to be a destination like they thought it would be.”
by Chris Morran via Consumerist