FEEDBACK [email protected]
growth for 2020 of a strong
3.4%, to $78 billion. Even so, the
threat of a slowing economy can
make its gains seem tenuous.
Target’s stock, along with those of
many other retailers, took a sharp
tumble in early August after the
Trump administration imposed
tariffs on a host of the Chinese-
made items that fill store shelves.
Many industry watchers see
groceries as a place where Target
can boost revenue in a category
that’s relatively resistant to
economic upheaval. Groceries
account for only 20% of Target’s
sales, compared with 56% of
Walmart’s. Improvements here
could add billions to Target’s top
line. Kurt Jetta of TABS Analyt-
ics says that while Target can’t
compete with Walmart as a full-
service grocer, the right food of-
fering could add $40 to $50 per
visit from shoppers who buy food.
Indeed, Stephanie Lund quist, the
head of Target’s $15 billion food
business, says Target shoppers
who buy a food or beverage item
spend twice as much per visit as
those who don’t.
Outside of the grocery aisle,
Target is consolidating its gains.
In interviews, executives fret
about letting its new brands go
stale as some older ones did.
Julie Guggemos, senior vice
president for product design
and development, says that to
prevent backsliding, the company
is creating a team to provide
“proper governance” for brands,
making sure each one is growing
at the expected rate, and polling
customers regularly.
But Target will be playing just
as much offense as defense. Now
that the chain has its house in
order, Cornell says, it should be
able to take advantage of turmoil
elsewhere in retail. “As competi-
tors around us close stores, we
have market share opportuni-
ties,” he says. “The winners and
losers are breaking away from
each other at an accelerated
pace.” The losers’ customers, pre-
sumably, will be welcome under
the sign of the bull’s-eye.GROCERIES TO GROW ON Tar ge t s a y s
shoppers who buy food or beverages
at its stores spend twice as much per
visit as those who don’t.
THE E ARLY
BIRD
GETS THE
WORM.
EARLY
INVESTORS
GET THIS.
Our essential daily newsletter profiles the deals and
dealmakers that are redefining the business landscape
and challenging people’s views on capital investment.TERM SHEET
fortune.comnewsletters