Target hopes to make some changes for shoppers.
After reporting another drop in quarterly earnings on Wednesday, the company issued a cautious sales and earnings forecast for the current period and cited some upcoming turnarounds to counter those shifts.
The Minneapolis company is dealing with rising costs, including rising theft, as a big factor, and consumers becoming more cautious about spending.
So what does that mean for shoppers?
Focus on groceries
Apparently, that could mean a greater focus on groceries.
Officials told CNBC that the Minneapolis-based retailer hopes to become more of a food and beverage destination.
“It’s actually a gateway to the rest of the store,” Rick Gomez, chief food and beverage officer, said in an interview. “It’s driving traffic to the store. It’s driving traffic to our site. And then while they’re picking out what food and drink they need, they’ll browse the rest of the store and maybe pick up a few things at Ulta.” [Beauty at Target] Or some things in clothes.
The company said it has added more items to its Good & Gather grocery brand, as well as to its Favorite Day line of snacks and sweets.
But what does that mean for prices?
“When times are tough and your paycheck is paycheck to paycheck, you can’t buy food that nobody’s eating,” Gomez said. “So it’s really important for us that we offer good value and a good price, but also really good quality.”
Theft prevention
Target said the theft is cutting into its bottom line and it expects related losses to increase by $500 million from last year, when it estimated losses from theft at $700 million to $800 million. This means losses could reach $1.2 billion this year. The company said it’s seeing an increasing number of violent incidents in stores as well, but it doesn’t want to close stores and is expanding safety and closing some items.
Retailers experience a series of robberies and, in some cases, close stores and withdraw from locations due to heavy losses, some of which are related to criminal gangs. This problem has received more notice in the past few years as retail thefts and high-profile mob theft have received national attention.
“We are making significant investments in strategies to prevent this from happening in our stores and to protect our guests and staff,” the company said in a statement. “We are also focused on managing the financial impact on our business so that we can continue to keep our stores open, knowing that they create local jobs and provide convenient access to essentials.”
Returns and renewals
Given this competitive environment, Target continues to make investments in stores and online.
The discounter said in early March that it plans to invest up to $5 billion this year to expand services for customers, including a delivery service for returns, renewals at 175 stores, and online shopping improvements.
Shares of Target were up nearly 1% at the opening bell.
Affordable fun
Earlier this year, Target announced plans to “launch or expand more than 10 owned brands, and bring thousands of new and premium products to guests at incredible prices.”
The company said it will offer more items starting at $3, $5, $10, and $15, as well as better promotions and changes to its Target Circle loyalty program.
return campaign
Drive-up Target returns launched at Target stores across the Chicago area earlier this month.
“Our journey to expand our fulfillment options begins with making it easier for our guests to shop with us,” Mark Schindel, Target’s executive vice president and store director, said in a statement. “That’s why we launch Drive Up Returns. Allowing our guests to complete the return process from the comfort of their own vehicle underscores our commitment to helping our guests shop — and return — however they like.”
Shoppers will be allowed to return most new, unopened items within 90 days of purchase from their car for free. However, the time frame goes up to up to a year for Target-owned brands.
By June, the offer will be available in nearly 2,000 Target stores nationwide.
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