Target’s favorite day brand contains snacks and indulgences.
Target
Target is launching a food and beverage brand that focuses on snacking and enjoying, as the retailer wants to give customers reasons to keep coming back, even after the Covid pandemic.
The new private label, Favorite Day, will include more than 700 products, including premium ice creams, bakery, beverage mixers, mocktails and cake decorating supplies. It will appear in store shelves and Target’s website in early April.
Rick Gomez, chief food and beverage officer, said Target has been developing the favorite day for more than a year, but said it has become important as people eat more meals at home and crave ways to have a stressful and monotonous time. escape.
“Right now, more than ever, people need a little bit of reward, a little bit of indulgence, a little bit of joy in every day,” he said.
Groceries are less profitable than other merchandise Target sells, but it drives traffic. Target sought to differentiate itself from competitors and improve margins by introducing exclusive brands across merchandise categories, including food and beverages. Nearly two years ago, the company debuted a grocery brand Good & Gather and announced plans to phase out two private labels, Archer Farms and Simply Balanced. Good & Gather generated about $ 2 billion in sales last year.
Good & Gather is Target’s flagship brand with more than 2,000 products. It is made without artificial flavors and sweeteners, synthetic colors and wheat syrup with high fructose – and contains a newer, distinctive label with gourmet pasta sauces, coffee and pizza. Favorite day, on the other hand, is focused on goodies. Target has another brand for food and beverage products, Market Pantry, which consists of low staples such as flour and coffee filters.
The pandemic has increased Target’s profile and share price. As shopping drove less to stores, they moved to the large retailer due to the large variety and online options such as the pickup. Some consumers have spent more dollars on items like home decorating, workout clothes, and video games because they spend less on travel or dining out.
Target’s comparable sales, an important measure that monitors sales at stores that have been open for at least 13 months, increased by 19.3% in fiscal 2020 compared to the previous year. Digital sales increased by 145% year on year. Food and beverage accounted for about $ 18 billion (or about 19%) of Target’s total sales of $ 92.4 billion in 2020.
The company’s shares have risen by almost 67% in the past year. But the stock returned from its 52-week high of $ 199.96, which it reached on January 13, due to concerns that the 2020 performance will be hard to beat.
Target achieved about $ 9 billion in market share last year, but declined to say how much comes from food and beverages or specific merchandise categories. According to market research firm IRI, the retailer’s growth in groceries has surpassed the industry and almost every major competitor.
According to IRI, Target’s total food and beverage sales grew by almost 21% in 2020 compared to the previous year. This is more than the industry-wide growth rate of about 15% and double that of Walmart, the country’s largest grocery store, which increased total food and beverage sales by about 9% for the year.