As Target seeks to boost sales in the face of consumer inflation concerns, the retailer is focusing on its own brands.
The company announced Tuesday, June 14 the launch of a private label Casa Canteen ready-to-drink (RTD) cocktails, noting their availability in stores and through the retailer’s same-day e-commerce channels.
“We know our customers are increasingly looking for convenient adult beverage offerings,” said Target’s executive vice president and chief food and beverage officer. Rick Gomez in a report.
Target leveraged its beer, wine and spirits offerings to drive digital sales. In May 2021, the brand announced that these items were offered for curbside or in-store pickup at more than 1,200 Target stores across the United States and for same-day delivery via Shipt at more than 600 outlets. sale. Additionally, the retailer said there was a 450% increase in digital orders in the adult beverage category in 2020.
Read more: Target offering delivery, curbside pickup for alcohol at 1,200 stores
The news also comes as, in the face of inflation, major food and drink retailers have seen a shift from national brands to lower-priced private label offerings.
On a call with analysts last month discussing the retailer’s first quarter 2022 results, Target’s executive vice president and chief financial officer Michel Fiddelke noted this change, emphasizing the “strength of own brands in food and beverages”.
See more : Target transforms stores to meet online grocery demand
He added that this change works in the retailer’s favor as it is “good for the margin as well.” So, by expanding into new private label categories, Target is looking at categories that both appeal to its customers and increase the profitability of sales within those categories.
Walmart, the world’s largest grocery retailer, noted the same change.
In a call with analysts in mid-May to discuss the company’s first quarter results, Walmart’s executive vice president and chief financial officer Brett Bigg noted that inflationary concerns are leading to “an increase in the penetration of private-label grocery stores,” with consumers choosing lower prices over trusted brands.
Read more: Walmart sees shift to private label groceries amid rapid food inflation
Indeed, the data confirms this trend among food retailers. Research from the May U.S. edition of PYMNTS’ Digital Economy Payments study, “Digital Economy Payments: How Consumers Pay in the Digital World,” showed that average consumer spending on groceries fell between March and April, even as food prices continued to rise. , suggesting that consumers were probably choosing to switch to less expensive brands or products.
See more : Insufficient funds caused 27% of consumer chargebacks in April
The consumer price index for all urban consumers (CPI-U), released by the US Bureau of Labor Statistics (BLS) on Friday (June 10), showed food prices rose 10.1% year-over-year in May, marking a 17.1% increase above the price change for all items, 8.6%.
Moreover, grocery store prices are inflating even faster than food prices in general. The CPI-U noted that take-home food (i.e. groceries) prices rose 11.9% year-over-year in May, 38% more than the overall rate.
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NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022
About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.
