US retailer Target Corp has said it will roll out its ‘fresh food’ initiative to several hundred more stores next year.
Speaking at the Goldman Sachs Seventeenth Annual Global Retailing Conference on Wednesday (15 September), Target CFO Doug Scovanner said the launch of the PFresh format had been a “success” and it plans to now expand the initiative further next year.
“Moving into 2011, we will continue to aggressively roll-out this new concept through another wave of hundreds and hundreds of our discount stores,” Scovanner said, “340 of which were converted or will have been converted by the end of this month. I would expect to convert an even larger number next year, driving incremental same store sales from this concept well above a full point of comp in 2011 for the year.”
As well as being apparel and mass merchandise stores, PFresh offers fresh food, and at the same time serves as an incentive to get customers to visit other parts of the store, Scovanner said.
The firm last month booked an increased in second-quarter profits. For the three-month period to the end of July, the company earned US$679m compared to $594m in the year ago quarter. Retail segment results sales increased 3.8% to $15.1bn.
Despite this, Scovanner told conference attendees that sales remained “challenging” in its retail business.
“From our standpoint, the key to future prosperity in the retail segment is to engineer ways to rejuvinate our topline growth, while generally maintaining the premium operating margins that we currently enjoy,” he said.
“Rather than sitting back and wishing that might happen, we have a fundamental and large scale strategy deployed to do just that, to increase the topline performance while maintaing or perhaps even enhancing over time, the operating margins. That of course is BeFresh, a programme that is well under way, bringing grocery and related products to our discount stores,” Scovanner said.