Finding frequency with food

The addition of food to several Target discount stores in Minnesota has predictably resulted in increased customer traffic and higher average transaction sizes. Including food in the product mix has a way of doing that. Retailers such as drug chains discovered that a decade ago, when large refrigerated sections became a standard feature of store designs.

While Target stores have always offered dry groceries and consumables, the two store pilot program features an expanded frozen and refrigerated section as well as fresh products such as meat and produce. Unfortunately for Target, the company needs the frequency generating benefits of food now, but it will be years before the test can be expanded to a meaningful number of stores.

Only two more stores with the expanded food offering are scheduled to open next March. Target executives have indicated that one third of the openings planned for July could include food and by October of 2009, when Target completes its third group of openings, as many as half of the new stores could have food. The company is only planning to open 70 new stores next year and the year after that the number will be even less. That means the company would need to embark on an ambitious remodeling program for its food initiative to have any impact and even them it would take years for the changes to be rolled out to a critical mass of stores.