Overall sales at Target were up in the first quarter this year, even though the company’s “core” business was slightly down. How did Target turn a profit? Groceries, execs say. After 550 makeovers, Target stores devote as much square footage to foodstuffs as they do to dishware and dorm décor, and they appear to be selling.
Target has long enjoyed a reputation for good prices and good looks in departments like clothing and home accessories. (Michael Graves once designed a toaster for them.) Food seemed like an afterthought—you might grab a box of granola bars or fish a frozen dinner out of the lone freezer case, but 10 years ago, Target was not the place for a grocery run. With Target groceries now apparently outperforming other categories, the Market Report turns an investigative eye to its food aisles.
One Fairfax County Target provides a handy case study for price and selection analysis, as it’s located just a few hundred feet away from a Safeway on Arlington Boulevard. The Market Report conducted an item-by-item price comparison of 30 items and surveyed the offerings of each store. The results:
In general, Target dominates Safeway in price, and Safeway’s selection easily trumps Target’s, with a few curious exceptions on both ends. (Aesthetics are a draw, with no objective winner between Safeway's northern-California vibe and Target's smart red minimalism.)
Consider pricing of the most basic of basics: bread, milk, eggs. Each chain’s store brand offered savings over name brands, but Target’s version bested Safeway’s each time.
|Gallon skim milk||$3.99||$2.99|
A Safeway Club Card will knock 50 cents off the price of that milk, but Target still comes out on top.
Comparing a sampling of items one might pick up for dinner (chicken, salad fixings, fruit), and the price difference becomes more pronounced.
|Red bell pepper||$2.49||$1.29|
|Fresh Express bagged romaine||$3.49||$2.99|
|2 lbs. Perdue chicken breasts||$9.98||$4.98|
|Store mac n cheese||$1.29||$0.57|
Again, a Club Card curtails costs at Safeway--the Club price-per-pound on chicken is identical to Target's, and it shaves 30 cents off the macaroni--but that would still put the total at $22.44, $5 more than Target.
But price isn't everything, especially for shoppers looking for seasonal fruits and veggies. Safeway’s produce selection trounces Target’s. Yes, Target offers cabbage, cucumbers, and cauliflower, but cherries? Kumquats? Brussels sprouts? Eggplant, ginger root, radishes? Target’s bell peppers are cheap, but its asparagus basket is empty and one measly type of apple is for sale (Gala). The grocery newcomer still has a ways to go in produce.
Comparing the two stores’ frozen offerings, though, reveals that Target can compete on selection and Safeway on price. Safeway wins on freezer-case square footage, but Target isn't far behind. And when it comes to price on frozen low-cal options (all-important in health-conscious Washington), Target still bests Safeway, but less dramatically.
Each of Safeway's items was tagged with a NEW PRICE marker, indicating reductions in previous regular prices—Lean Cuisine is down from $3.99. Target still wins, but is the margin wide enough to prompt customers to go next door for low-cal frozen ravioli when they’re already at Safeway picking up kumquats? Maybe not.