Target’s enhanced curbside pickup, new private label brand help drive grocery sales up double-digits

Strong initial sales of Target’s new private label food and beverage brand Favorite Day and “tremendous growth” of its Good & Gather line helped further lift the retailer’ grocery sales – contributing to a strong overall quarter in which comparable sales grew 8.9% on top of a record 24.3% growth in the same quarter last year and total revenue grew 9.5% to $25.3bn.

“The theme of this year’s performance has been growing on top growth,”​ which is possible thanks to the groundwork Target laid “years ago in our stores, owned brands, supply chain, technology and our team,”​ CFO Michael Fiddleke told investment analysts during the retailer’s quarterly call Aug. 18.

‘The growth in Drive Up is truly remarkable’

Among the investments paying off and boosting grocery is the development of Target’s curbside pickup program, Drive Up, which contributed nearly $1.4bn in dollar sales during the second quarter and, when combined with Target’s other same-day services – in-store pickup and Shipt – grew 55% this year on top of more than 270% last year, CEO Brian Cornell said.

“The growth in Drive Up is truly remarkable. … [It] is the single highest-rated service we have. But also, for us, it’s fast and very, very efficient, and we love the margin that comes along with those products,”​ and so we are growing the business, COO John Mulligan said.

Specifically, it added 5,000 items to the curated assortment available for pickup and Drive Up, including adult beverages, meal kits, pet food and greeting cards, he said.

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