Target Adapts to Changing Market Conditions
Rolling Out a New Food and Beverage Line
Target (TGT) is launching a new food and beverage line early next month. The new grocery brand is called Favorite Day and is focused on snacking and indulging. It will include more than 700 products from premium ice creams to beverage mixers to cake decorating supplies.
Target gained roughly $9 billion in market share last year. Customers have turned to Target for home goods, electronics, workout gear, groceries, and other items during the pandemic. As Target looks ahead toward a time when more people will be vaccinated and may return to pre-pandemic habits, the retailer wants to hold onto its new customers. It sees brands like Favorite Day as a way to do this.
Target’s Sales Soared Last Year
Target’s food and beverage sales climbed by almost 21% in 2020 compared to 2019. This was higher than the growth rate for the industry as a whole, which was about 15%. Walmart (WMT), the largest grocer in the country, saw about 9% growth for the year.
Groceries are not as profitable as some of Target’s other merchandise. However, groceries draw people to Targets stores and its website, which fuels sales of other products.
Target’s stock price has climbed almost 67% over the past year. It hit a 52-week high of $199.96 on January 13, but it has dropped since then as analysts predict that the company will have trouble beating its 2020 performance.
Target has done an impressive job adapting to unique market conditions over the past year though offering curbside pickup, ramping up its ecommerce offerings, designing masks as part of its clothing lines, and more. With Favorite Day, Target is making an effort to adapt to another unpredictable year.
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