Target testing grocery at LA25 stores

Target (NYSE:TGT) has been using the Los Angeles area as a test market and plans to experiment with new grocery initiatives in its LA25 stores there. But those tests won't extend to fresh foods as Target tries to first get the basics right.

The retailer unveiled the LA25 test stores in September and planned to test some 50 different store initiatives there before rolling out to other locations.

Much of the company's in-store changes have been in four key product categories: Style, Baby, Kids and Wellness. But grocery is another priority they're working on.

"We want to make sure we are focused on getting the fundamentals right in food—to differentiate the assortment to be clear about who we are and who we are not," CEO Brian Cornell told analysts, according to Supermarket News. "We recognize we have to improve freshness, but we're going to be really careful about moving into new spaces that add greater complexity to the business model."

Grocery has proven problematic for Target over the years. Current management has a goal of shifting assortment to include more healthy, natural and organic choices as a point of differentiation. But according to Cornell, that doesn't extend to a substantive shift to more fresh foods. At least not yet.

Target is also focused on inventory and supply chain issues, taking a closer look at assortment with an eye toward reducing inventory in back and reducing out-of-stocks at the shelf.

For more:
-See this Supermarket News article

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