Sometimes, people are confused when I use the term SuperTarget. This is because SuperTargets, unlike WalMart SuperCenters, are not yet commonplace across the nation. There are only a little over 200 SuperTargets across the nation. (Incidentally, one of the first ones were built right here in the little town I live in back in 1995.)
Target operates four store formats (exclude one-off urban stores). They are Targets, Target Greatlands, PFresh Stores, and SuperTargets. These are listed in order of their grocery offerings. Targets have very limited grocery offerings, and are generally the smallest in size. Greatlands have more offerings than the basic Targets. PFresh Store format is Target’s newest, currently being rolled out. These stores would focus on Target’s private label brands. SuperTargets offer Target shoppers the widest variety of grocery items. As you can see in the video above, they basically fit a grocery store inside a Target store. These stores are very large, and is the epitome of one stop shop for the savvy Target shoppers.
The threat from Target, unlike Walmart, is not generated through scale. As mentioned above, SuperTargets are not commonplace, and there is unlikely one right around the corner from your everyday grocery stores. However, Target is very good at attracting a specific segment of shoppers via their product offering. Their private label commands a following that warrants a new store format! These shoppers may not go buy meat and fresh vegetable every week. But they pick up cookies, ready-to-be-microwaved meals, etc. that are widely available at many Targets across different store formats. And they are picking up their favorite brand – Archer Farm, the private label brand available only at Target.
Continuing with my Food for Thoughts series, this is my little snippet on WalMart SuperCenter. For those of you who would never set foot inside, you may be surprised by this video. WalMart’s grocery selection is actually pleasantly presented. Pricing on their grocery items, like all other items at WalMart, is budget friendly. While this video may not persuade you to start your grocery shopping at WalMart, I think it’s apparent why WalMart SuperCenters present such a great threat to grocery stores everywhere.
This video would soon be outdated. WalMart is continuously improving their grocery efforts, for good reasons. You may not need a new shirt every week. But, for some families, they need a new gallon of milk every day!
I have written before how Kroger Marketplaces are taking on mass merchants. As more mass merchants stock groceries, groceries are staring to stock mass merchant products.
Here is a video taken recently at a Kroger Marketplace. You could see that next to the milk is furniture. This store carries a wide variety of products, most are very economical. I have myself bought a few pieces of home goods from Kroger stores. My area rug costs only $20. I think in the current economy, Kroger Marketplace posts a specific threat. To furnish an entire house / apartment at one time could post a significant financial strain on a family. This is exactly where Kroger could fit in. Along with buying the necessities (e.g. milk), you could easily pick up something for your new / existing home that you’ve been wanting to pick up. Because of the price point, Kroger can actually encourage impulse purchase for home goods. It’s a very different proposition than making a specific trip to a Target.
It doesn’t appear that Kroger is eager to expand this model. It’s being very selective in where to put in a Marketplace store. I look forward to see how this story would continue to evolve.
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