Target testing cafe concepts

Target (NYSE:TGT) will roll out new cafe concepts in 14 test stores this fall.

Instead of the typical boxed hot dogs and nachos, nine stores will get a Freshii cafe, with artisan style pizza, fresh salads and pressed juices, while three stores will get a limited menu of Pizza Hut artisan pies. Two stores in the Minneapolis area will get outposts of D'Amico & Sons, a local Italian restaurant, USA Today reported.

Currently almost all—1,700 out of 1,800—Target stores have cafes. In the test markets, the Freshii, D'Amico & Sons, or Pizza Huts will replace the existing cafes.

The test is the first change in Target's food strategy since hiring new head of grocery, Anne Dament, a former Safeway executive. The strategy was implemented as part of a larger executive plan, handed down by CEO Brian Cornell, to increase Target's offering of natural, organic and local food assortment.

About 40 percent of Target customers go to the cafe while shopping. The retailer hopes to increase cafe popularity and prove that it is serious about health and wellness. Down that same path, Target recently made a deal with CVS Health (NYSE:CVS) to acquire the pharmacies and clinics at more than 1,600 Target stores.

Target's investments in style, baby, kids and wellness have impacted same-store sales, which grew three times as fast as the company average in the most recent quarter.

Although food has a small profit margin, it can drive sales and improve traffic.

For more:
-See this USA Today article

Related stories:
Target promising more delivery details
Target, CVS partnership signals strategic shift
Target hires Anne Dament to overhaul food business
Target CFO Mulligan becomes first COO
Target to test grocery delivery