retail news in context, analysis with attitude

The Wall Street Journal reports that “Target plans to place greater emphasis on food, health-care products, personal items and other necessities, while offering fewer discretionary items to avoid big markdowns that have hobbled its earnings.” The company also is “investing in technology to improve different areas of its operations, such as its pharmacy program, and plans an aggressive drive to emphasize low prices. The retailer plans to design the majority of its new and remodeled stores in a way that draws attention to fresh foods and other consumables.”

The story also says that “in its new and remodeled stores, Target will allocate more shelf space to non- discretionary categories and try to leverage its advertising and promotions to drive awareness of this merchandise,” and plans an “aggressive assault” on Wal-Mart through various marketing venues.

KC's View:
This probably makes sense at some level for Target, but it seemed noteworthy that some of the analysts in the papers are saying that Target is a company that has seem oriented for an up-economy, which is why it is suffering right now.

It is unclear to me how fast Target will be able to re-orient its business for a recessionary economy, and whether it will be able to do effectively enough to appeal to customers without undermining the core “cheap chic” message that it has been pounding home for years.

Target has been aiming at one bull’s eye for years…and it isn’t always easy to adjust one’s sights and persuade the customer that you have a legitimate case. It’s possible, but not easy…especially when the competition is Walmart, which has been making a more consistent argument along these lines.