|Mark J. Tritton, executive vice president and chief merchandising office of Target|
“We know we need to enhance our assortment of convenient options for our guests, food that’s ready-to-eat, ready-to-heat or ready-to-cook and save families time and money,” Tritton said during an Aug. 16 earnings call with investment analysts. “In addition, we’re focused on enhancing our exclusive brand assortment in food and beverage while ensuring we are priced right daily on key opening price point items.”
The Minneapolis-based retailer recently hired two industry veterans to help accelerate its food and beverage strategy. Mark Kenny, formerly of Wal-Mart Stores, has been named vice president divisional, meat and fresh prepared food, and Liz Nordlie, previously with General Mills, joins Target as vice president, product design and development for food and beverage. Both will report to Jeff Burt, who joined the company in April as senior vice president of grocery, fresh food and beverage.
In the latest quarter, Target’s comparable sales in the food and beverage category were flat, an improvement over prior quarters as the company continues to work on expanding its assortment.
“We are seeing improvement based on our work to improve freshness and reliability as well as our work on value perception. In produce, we saw high single-digit comp increases in the second quarter, driven by even stronger growth in organics,” Tritton said.
Overall, net earnings in the second quarter ended July 29 totaled $672 million, equal to $1.22 per share on the common stock, which compared with net earnings of $680 million, or $1.17, in the year-ago period. Sales of $16,429 million were up 1.6 percent from $16,169 million.
Brian C. Cornell, chairman and CEO, said the company delivered better-than-expected performance in a continuing challenging environment.
“In particular, second-quarter traffic, which was up more than 2 percent, was much stronger than our expectations and better than recent trends,” Cornell said. “And the strength was broad-based across the country, across categories and across channels. And while the consumer and competitive environment remains choppy, better-than-expected performance occurred throughout the quarter and wasn't limited to a short period within the quarter.”
In the food and beverage category, he added, “given continued competitive and deflationary pressure… we're pleased that we're seeing early signs of progress.”