(AP Illustration/Jennie Song)
NEW YORK (AP) — Discount retailer Target has revamped its grocery department since the COVID-19 pandemic with a variety of items, from Korean food and mocktails to barbecue-flavored trail mix, to meet the needs of shoppers who want to experiment while staying on a budget.
Like many retailers, Target has found that some of the habits customers picked up during the public health crisis, like snacking and an interest in new flavors, are sticking around after the pandemic. But while the inflation that boosted food prices last year has abated, shoppers are still looking for ways to save money.
Under the direction of Rick Gomez, Target's chief food, staples and beauty officer, the Minneapolis-based retailer plans to introduce up to 2,000 new food and beverage items this year, including products from its Good & Gather, Market Pantry and Favorite Day brands, as well as national and emerging brands.
The need for innovation goes hand in hand with a focus on affordability: In January, Target launched a line called Dealworthy, featuring nearly 400 items including tech accessories, toiletries and other basics, most of which are priced under $10. The company announced last week that it was slashing prices on 5,000 food, drink and household staples.
There's a lot at stake: Food and beverages accounted for 23% of Target's total sales, its second-largest category after beauty and home goods, according to its most recent annual report.
The Associated Press recently interviewed Gomez about food trends and how inflation and social media are affecting shopper behavior. The conversation has been edited for length and clarity.
Q. What is your overall food and beverage strategy?
A. We are moving in a direction to actually celebrate food, not just sell food. For us, that means we need to put effort into the assortment of products we sell. We think of ourselves as curators of a magical mix of big national brands, exclusive private label brands, and smaller emerging brands that are on track. We value the freshness of our flowers and produce, so when you walk into this section, it feels vibrant, seasonal, and fresh. We also focus on affordability to ensure our customers get what they want.
Q. What eating habits are you continuing post-pandemic?
A. Snacks and indulgences. During the pandemic, as everyone was isolated at home, people were looking for a little happiness. So we developed Favorite Day, which is really about tasty treats that are flavorful and indulgent. Even though the pandemic is over, I think this trend will continue.
Q. Which foods have low inflation? Which foods are problematic?
A. Prices have fallen for some items, such as meat, seafood and eggs, but the dry goods section of the store, for example items like candy, are still seeing price increases.
Q. How is inflation affecting the buying habits of your target customers?
A. We're seeing a variety of strategies to stretch the budget. Some are looking for larger value packs with better value, such as price per ounce or price per unit. Others are looking for entry-level value, seeking the cheapest product in the category. Some are considering private label. We're seeing growth in our private label brands, such as Good & Gather, Favorite Day and Market Pantry. This is one of the reasons we launched a new brand called Dealworthy.
Q. What are some of the food trends Target is embracing?
A. We have some fun new trail mixes, like a dill pickle flavored trail mix and a barbecue flavored trail mix. We've been innovating in the global flavor space. It started with the pandemic, they were trying to get out of a food rut and were looking for new flavors. And we saw growth in areas like Korean food and Indian soul food. One of our products this summer is our Favorite Day Italian Gelato Filled Macaroons.
Q. How has TikTok accelerated the pace of food trends?
A. New trends are constantly emerging. What has changed recently is that the pace of change is becoming faster and faster, driven by social media and platforms like TikTok. In the beverages space, we are seeing the growth of non-alcoholic drinks. So, we partnered with Sechey to bring you a line of non-alcoholic beers and mocktails. We are also seeing a fast-emerging health trend. We are seeing explosive growth in Olipop, a healthy soda. We are also launching an exclusive line of candies called Tandy, which offer health benefits around digestive health, relaxation, focus and energy.
Q. How does Target stay on top of trends?
A. We're always listening to our customers and listening to trends. We have a team that monitors social media to find out what's new and what's trending and try to capitalize on that. We have a team of world-class scientists. But there are also micro-trends, like cherry juice. That's already in our assortment. We can showcase that and capitalize on that trend.
Ann D'Innocenzio, The Associated Press
