Target CEO thinks this new food brand will be its biggest brand ever

Brian Sozzi
Editor-at-Large

Target has long been known for its high quality, affordable private label brands spanning the apparel, food and houseware departments.

They have been instrumental in Target wrestling market share away from department stores and Big Food. It’s one of the reasons why Yahoo Finance named Target company of the year.

So, to hear Target CEO Brian Cornell call out newly launched private label food brand Good & Gather as potentially its biggest brand ever, it causes one to take notice.

“I expect it [Good & Gather] to become our single biggest owned brand in our portfolio over the next couple of years,” Cornell told Yahoo Finance.

The Good & Gather food brand arrived in Target stores on Sept. 15. By the end of 2020, it will include products ranging from dairy and produce to ready-made pastas and meat. It will replace Target’s Archer Farms line.

The selling point to consumers here: the products are devoid of artificial flavors and colors. In some categories, organic options will be offered.

With Good & Gather, Target now has 25 different private label and exclusive brands. Food and beverage sales make up more than 20% of Target’s overall business.

“Their private brand business is doing very well, those are key margin contributors that most retailers would give an arm and a leg to have,” said Deutsche Bank retail analyst Paul Trussell.

This Wednesday, Oct. 23, 2019, photo shows Goods & Gather food items on display during a Target Holiday Outlook event in New York. (AP Photo/Mary Altaffer)

Good & Gather will take center stage in the hundreds of remodeled grocery departments inside Target stores. For years Target was never taken too seriously on the grocery front—one-off apparel collections from the likes of buzzy designer Isaac Mizrahi were all the rage. But under Cornell’s leadership, Target has significantly expanded the number of fresh food and other daily essentials and the overall look of the departments.

While some analysts on Wall Street still complain about Target’s food being out of stock—and the missed sales that come along with it—the situation has improved this year as Target has hired more experienced grocery industry employees at the corporate level and in stores.

Importantly, Target’s expanded grocery selection has kept a steady stream of traffic coming into the stores.

“I think food's important, but it's one of many areas we have focused on. But I think the work the food team has done over the past several years, we're really proud of,” Target COO John Mulligan said.

Mulligan added, “The quality of our produce has improved markedly. We have team members in-store who are knowledgeable about what's good and what needs to be just taken off the floor, about how much to order. And so we have a little bit more expertise at headquarters around food. We've hired regional food team members to help us interact with people who do deliveries into our stores. So many different elements of the food business have improved. We're proud of that.”

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi

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