Target has revamped its grocery aisles since the COVID-19 pandemic with items ranging from Korean foods and mocktails to barbecue-flavored trail mix as the discount retailer caters to shoppers who want to experiment while sticking to a budget.
Like many retailers, Target noticed that some habits its customers acquired during the height of the public health crisis, such as snacking and an interest in new flavors, have outlasted the pandemic. But the inflation that drove up food prices last year, though abating, still has shoppers looking for ways to stretch their dollars.
Under Rick Gomez, Target’s chief food, essentials and beauty officer, the Minneapolis-based retailer plans to introduce up to 2,000 new food and beverage items this year. The number includes products in its store label brands - Good & Gather, Market Pantry and Favorite Day - and from national and emerging brands.
The need to innovate coexists with a focus on affordability. In January, Target launched a line called Dealworthy that features nearly 400 tech accessories, toiletries and other basic items, most costing under $10. The company announced last week that it was cutting prices on 5,000 food, drink and essential household products.
A lot is at stake: 23% of Target's total sales come from food and beverages, the second-biggest category after beauty and households essentials, according to the company's most recent annual report.
The Associated Press recently interviewed Gomez about food trends, the effect of inflation and social media on shopper behavior, and other topics. The conversation was edited for length and clarity.
Q. What's your overall strategy for food and beverage?
A. We're going from not just selling food to actually celebrating food. What that means for us is we need to lean into our assortment of what we’re selling. We think of ourselves as curators, with a magical mix of big national brands, our own brands that are exclusive, but then also small emerging brands that are on track. We’re leaning into freshness, with floral and produce that when you walk into this section, it feels alive and seasonal and fresh. And we're leaning into affordability to make sure that our guests can get what they want.
Q. Which food habits from the pandemic have continued?
A. Snacking and indulgence. During the pandemic, people were looking for a little bit of happiness as we were all quarantined at home. And so we developed Favorite Day. And it’s really about savory, indulgent delicious treats. Well, we’re out of that pandemic, and we see that trend continuing.
Q. Which food items are seeing lower inflation? Which are problematic?
A. We are seeing some prices come down in some areas, like meat, seafood, eggs, while we are still seeing inflation in the dry packaged goods part of the store, with items like candy.
Q. How's inflation affecting Target's customers' buying habits?
A. We see a lot of different strategies to stretch the budget. Some people are looking for the big value pack. That has better value, price per ounce or price per unit. Others are looking for opening price points where they just want to have the lowest priced item in the category. Some are looking to private label, and we are seeing growth in our own brands ... Good & Gather, Favorite Day. Market Pantry. It’s one of the reasons we just launched a new brand called Dealworthy.
Q. What are some food trends Target is embracing?
A. We've got some fun new trail mixes, dill pickle-flavor trail mix, barbecue-flavor trail mix. We have some innovation in the space of global flavors. It started in the pandemic, and they were trying to get out of the food rut and were looking for new flavors. And we’ve seen growth in areas like Korean food, Indian soul food. One of the items this summer is Italian gelato-filled macarons under Favorite Day.
Q. How has TikTok sped up the pace of food fads?
A. There are constantly new trends. What’s changed recently is the pace of change getting faster and faster, driven by social media and platforms like TikTok. On the beverage side, we’re seeing growth in nonalcoholic beverages. So we partnered with Sechey to be able to deliver a line of nonalcoholic beers, mocktails. We also see trends coming really quickly around wellness. So we have seen explosive growth on Olipop, a better-for-you soda. We’re also launching an exclusive line of candy called Tandy, which offers health benefits around digestive health, relaxation, focus, energy.
Q. How does Target stay on top of trends?
A. We are constantly listening to our guests and listening to trends. We have a team that’s monitoring social media, looking for what’s new, what’s trending, and try to capitalize. We have a team of world class scientists. But then there’s a micro trend like with cherry juice. We already have that in our assortment. We can just put it on display and capitalize on that trend.
