Target cuts grocery prices at rival sales events

The customer is Target Corp in Chicago, Illinois, USA on Saturday, November 16, 2019. Shop at the grocery store in the store.

Daniel Acker | Bloomberg | Getty Images

Electrical appliances, toys, food?

Large-box retailers are shining a spotlight on the grocery sector as Target launches a rival sales event to face Amazon Prime Day directly. We are adding discounts and promotions to guide customers towards the aisles of cereals, meat and soda.

Target has rolled out Deal Days to compete with Prime Day in 2019, but this is the first time Target has used this event to promote groceries. The discount lasts from Sunday to Tuesday — a day longer than the e-commerce giant event.

Recently, Target may be looking at the grocery category differently. Grocery was the main reason Target’s sales surged during the pandemic and its market share increased. As people sat down at home, supper ingredients, pantry staples, and light meals drove the trip to the store. Target got off to a good start in the early months of the health crisis as it kept the door open through a blockade as an important retailer. When the rival store reopened, the target still attracted shoppers with its diverse merchandise, from eggs to training tops, as people integrated their trips and filled larger baskets.

Even if people make social plans and return to eating out, Target sees the grocery aisle as a way to get people back. In the coming months, people should fill the fridge and continue cooking, even if Target and other grocery stores plan to ask for drinks with friends or take their families to dinner. Test if you can persuade.

Prior to the pandemic, US consumers spent more each month in restaurants and bars than in grocery stores. That pattern reversed in March 2020. Over the past two months, the habit of spending more on eating out has returned, according to data from the US Census Bureau. As a result, grocery stores compete for a larger portion of the shrinking pie.

At stake during Amazon Prime Day is spending comparable to the busiest days of the holiday shopping season. Over 1,000 consumers and visitors to US retail sites. According to an Adobe survey, nearly 60% of consumers plan to shop online during Prime Day.

Retailers of all sizes take shopping holidays, and sales grow as shoppers browse and buy more than usual.

Target offers special discounts on Deal Days, but with special grocery-related promotions. Distribute a $ 10 gift card to customers who spend $ 50 or more on food and drink while using one of the same-day services such as curbside pickup. And courier service, Shipt. The company refused to share certain items for sale.

At least two of Target’s competitors, Walmart and Amazon, will also hang grocery trading. Wal-Mart is also adding groceries for the first time to its annual sale, Deals for Days, according to a spokeswoman for the company. Reduce prices for foods such as ribs, watermelons, ice cream and coffee.

Amazon plans to sell some groceries for $ 1 and its wine brand, Cursive, will be on sale. Whole Foods will discount seasonal products such as lemonade and caprese pizza, a spokeswoman for the company said.

When used by shoppers, these deals can help businesses face tight year-over-year comparisons. All three showed large growth numbers that were difficult to match or beat, especially in the grocery sector, where consumers stockpiled goods during the pandemic.

Last year’s sales of Target increased by more than $ 15 billion. This is more than the combined increase in sales over the last 11 years. According to a survey by the company itself and third parties, the company gained about $ 9 billion in market share during the year.

The company’s stock has risen nearly 31% so far this year, reaching a market value of approximately $ 114.05 billion.

Target’s equivalent sales, which track sales in stores that have been open for at least 13 months and operate online, increased by 19.3% in the last fiscal year. This is a higher percentage than other major grocery stores. Equivalent sales of Kroger increased by 14.1% and sales of Wal-Mart increased by 8.6%. The definition of sales equivalent to a retailer’s fiscal year is slightly different.

Target also discovered that the combination of groceries and digital services can increase customer loyalty.

March 2nd Fourth Quarter Financial Results Announcement, Target’s Chief Financial Officer, Michael Fiddelke, said after customers increased visits to stores, increased food and beverage spending by an average of 20% to 30%, and after buying fresh and frozen food at the porch and stores. He said he tends to increase sales in other categories. The first pickup.

On Saturday, November 16, 2019, the frozen food display case at Target Corp.’s store in Chicago, Illinois, USA will display a sign promoting Shipt, Target’s same-day grocery delivery service.

Daniel Acker | Bloomberg | Getty Images

The company also shared that food and beverages accounted for 20% of total annual sales, making this category the second largest sales driver after beauty and household products. During the pandemic, the company launched a private label for snacks and desserts and a collection of gourmet pasta and coffee.

So far, Target has been able to continue to grow. In the first quarter, food and beverages grew in the low to mid-single digits, despite tight comparisons with the previous year when consumers were stocking and evacuating.

Targets use groceries as a differentiator and “defense mechanism” for Amazon Prime Day. Mr. Krishna Kumar Davy, President of Strategic Analysis at market research firm IRI. Over the past year, Target has encouraged larger baskets and helped attract new customers, he explained.

According to IRI market research, Target is gaining ground among low-income customers and older shoppers.

We’ve also encouraged more in-store business trips than our competitors over the past few months. As of early June, target trips have increased by 16.1% year-to-date compared to the same period a year ago. All other peers except Costco are in the low single digits, according to IRI, which collects consumer data from a representative sample of over 100,000 households.

Compared to Amazon, Target also has a much larger grocery footprint. Amazon owns more than 500 Whole Foods stores and has approximately 12 Amazon Fresh stores, an expanding grocery chain. The target has about 1,900 stores.

Eating out may come back, but due to other factors such as working from home, food consumption at home is still above pre-pandemic levels, Davie said. In addition, grocery sales can resonate more than other types of transactions, he said.

“Everyone needs something-more than an iPad or something,” he said. “It is a high frequency item.”

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Target cuts grocery prices at rival sales events

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