retail news in context, analysis with attitude

The Wall Street Journal has a story about how, despite all its efforts to turn around its grocery business, Target continues to find that its shoppers "aren’t visiting often enough to buy the retailer’s fresh meat, fruits and vegetables before they spoil."

The result, the story says, is that perishable foods are, in fact, perishing ... and taking profitability with them. At the same time, Target says that "customers were making fewer trips for smaller purchases."

According to the story, "Target’s board of directors has been wary of capital-intensive options to improve groceries after being unable to generate meaningful returns from previous investments, according to people familiar with the matter.

"The issue, in part, is that Target’s supply chain wasn’t built to transport items with a short shelf life. Perishables currently are funneled through one of the company’s four food distribution centers or through infrastructure owned by C&S Wholesale Grocers."

That said, defenders of Target's current positioning say that it is still in the early stages of re-inventing its approach to grocery, and that the company has to be given time to change the way it operates, which it hopes will change its image, resulting in a change to shoppers' habits and, finally, higher profitability.

But COO John Mulligan describes the current problem this way: "We sit in the middle. We’re not really special and we’re not a full grocery. And so we’re sitting in the middle of no man’s land."
KC's View:
"We're not really special?" That's a helluva way to describe a retail business ... especially your own retail business.

Mulligan, it seems to me, pretty much summed up in 26 words all the reasons a retail business might not survive.

Yikes.