Target Corp. (NYSE: TGT), last quarter has shown an increase in sales in all of their major departments except for food and beverage. Food price deflation has been a leading cause in slowed revenues for companies like Target, but Wal Mart has reported that their sales growth in grocery has been the best in 5 years with 56% of their sales come from grocery. Target’s groceries sales, however, only account for 22%, but that is still a bigger share than both their apparel category and home furnishings category.
Competitors such as Amazon and Whole Foods have already bolstered the grocery business. German grocery giant, Lidl, is also set to open stores in the United States. Another grocery chain called Aldi plans to add 400 more stores in the U.S. by next year.
Target has been trying to build a bigger assortment of organic and wellness oriented products and has improved their supply chain in order to ensure that consumers find fresher goods. Localizing their assortment of craft beer has also been a strategy. The company also recently hired 2 senior leaders to increase revenue in their food business.