Greatland beefs up impulse sales of food - Target's Chicago, Illinois-area Greatland superstores

Discount Store News, April 5, 1993

Although the new Target Greatland stores in Chicago are far from super-centers offering complete supermarket selections of fresh food, they do feature expanded selections of candy, snacks, beverages and convenience food products.

And that expansion should catch as much attention from Chicago supermarket chains such as Dominick's and Jewel as the general merchandise selection does from discounters like Venture.

The food departments at the 11 new Greatland stores appear designed to ensure that Target can increase the impulse sales potential of food and consumables through eye-catching displays, while maximizing profit margins through extensive use of Greatland private label food items.

The department's major features include: * Double-sized, 6-ft. deep endcaps for power presentations of such items as 12-packs of Pepsi; * A refrigerated cooler of Tropicana juices and juice beverages, including half-gallon cartons of Tropicana 100% Pure Orange Juice; * Private label Greatland soft drinks, juice drinks, cookies and crackers; * Rounded, wire-basket endcaps offering assorted candy bars, salted snacks and dips, and Brach's Pick-A-Mix bulk candy; * 8 ft. of microwaveable prepared foods from Hormel, Chef Boyardee and Lunch Bucket; and; * An endcap of Michael Jordan licensed Farley's fruit snacks.

Unlike its two main discount store competitors, Wal-Mart and Kmart, Target has steered clear of taking the full plunge into the grocery business. Longtime discount industry observers remember, however, that Target tried operating a combination food and general merchandise store in its infancy in the early '70s. The first Target stores offered groceries in 25,000-sq.-ft., leased departments within the original 130,000-sq.-ft. units.

Wal-Mart and Kmart began experimenting with food inside a traditional discount general merchandise store concept only in the late 1980s, when they unveiled their versions of the European hypermarket. Wal-Mart's Hypermart USA and, a little later, Kmart's American Fare, put an American spin on the European one-stop-shopping concept.

At a retail conference in New York, Kenneth Macke, chairman of Target's parent, Dayton Hudson Corp., was asked if Target were developing its own version of the then 220,000-sq.-ft. emporiums. "No," Macke, replied. "We tried that before and decided it doesn't work."

What Macke didn't say was that Target was developing its own super-sized store concept--Greatland. The original Greatland store, which opened in Apple Valley, Minn., in October 1990, covered 169,000 sq. ft., nearly as much area as the new Wal-Mart and Kmart supercenters, which had evolved from earlier hypermarket experiments. Just as Wal-Mart and Kmart downsized their hypermarkets to more manageable supercenters, Target eventually settled on a smaller, 125,000-sq.-ft. prototype for its Greatland store.

Typical of the way Target tends to differentiate itself from its two major competitors, Target Greatland marched to the beat of a different drum. The original Greatland had a larger than average food department, but then just about everything else in the store also was larger than average. The new Greatland stores in Chicago, although smaller than the original Apple Valley unit, and smaller than a 140,000-sq-ft. prototype such as in Columbus, Ohio, take a much more aggressive approach to building food sales.

The refrigerated Tropicana cooler stands in an aisle alongside a cooler of Pepsi products. The half-gallon cartons of 100% Pure Orange Juice were priced at $2.99 each, while assorted flavors of Tropicana Twister juice beverages were 59 cents for the 10-ounce bottle and 79 cents for the 16-ounce bottle.

Target's push into private label follows earlier efforts by first Wal-Mart and then Kmart to develop store brand food products. But the extension of Target's private label Greatland name into the food arena differs somewhat from the strategies of Wal-Mart and Kmart. Wal-Mart and Kmart are positioning their respective Sam's American Choice and Nature's Classics lines as premium products, extolling the quality of the products more than the low price.

Greatland products, such as the private label cookies and snack crackers made by Keebler, appear to be of good quality. In contrast, though, the stark packaging and position of Greatland foods on the shelf alongside higher priced national brands suggest a more price-oriented strategy.

The line-up of Greatland food products includes: * Cola, Diet Cola, Grape Soda, Orange Soda, and Root Beer: two-liter bottles for 89 cents, 12-ounce six-packs for $1.19; * 17 skus of cookies and crackers, including Chocolate Supreme Chocolate Chip Cookies, Fruit Crepe oatmeal fig cookies, Cheddar Stix, Cheddar Snax, Creme Delights chocolate/vanilla sandwich cookies, Stone Ground Wheat Snack Crackers, Sophisticates snack crackers, and Wheat Crisp snack crackers; * Cranberry Strawberry, Cranberry Juice, Raspberry Cranberry, and Cranberry Grape juice drinks.

In addition to the private label offerings in the juice drinks, Target also carries most of the top-selling national brands, including Tropicana, Dole, Ocean Spray, Minute Maid, Kool-Aid, Hi-C, Welch's and CapriSun.