Target Refocuses on Grocery Categories

Minneapolis After reporting a 41% slump in its fourth quarter net income on Tuesday, Target plans to place stronger attention on its food, health care and other personal item categories going forward.

The move will help “to improve sales, capture market share and increase profitability in this challenging economic environment," Target’s president and chief executive Gregg Steinhafel said during a conference call with analysts on Tuesday.

"We plan to further enhance our assortment of dry, dairy and frozen [food products], and add perishable items in new and remodeled general-merchandise stores," he said.

This will include redesigning a majority of the chain’s new and remodeled stores to draw consumers’ attention to these categories. The plan will be supported by the company’s investment in more perishable food categories.

While the plan seems to imitate one that Wal-Mart Stores has adopted over the years, Target hopes to beat its rival at its own game. Target is planning an aggressive advertising and promotional strategy “that will use large photos of featured items and headlines that emphasize their pricing,” said Kathee Tesija, Target's executive VP, merchandising.

The chain realizes it needs to fight to regain cost-conscious shoppers’ discretionary purchases, and feels these strategies are in line with “helping consumers seek ways to stretch their dollars,” she said.