Customers can soon drive to a nearby Target and pick up fresh and frozen grocery items like milk and bread, without browsing aisles or parking the car.
The national retailer said Thursday that it's adding hundreds of grocery items to its same-day services as many Americans look for safer ways to shop during the coronavirus pandemic. It will offer them at over 400 stores by the end of the month and more than 1,500 stores by the holidays. That's roughly 80% of its 1,871 stores nationwide.
Target Chief Operating Officer John Mulligan said speed and convenience have "become even more critical for our guests searching for easy and safe ways to shop during the pandemic."
"During a time when even more people are looking for different ways to get the items they need, we'll continue to invest in making Target the easiest and safest place to shop," he said in a news release.
Target's expanded assortment will include 750 new produce, dairy, bakery, meat and frozen items along with those already offered, like paper towels, canned goods and cereal. Shoppers buy the items online and pick up their bagged purchases inside of the store or by curbside.
Target had already planned to add fresh and frozen groceries to same-day services this year, but that effort has taken on new urgency as grocery items and online sales become crucial sales drivers. During the pandemic, Americans have cooked more at home and made fewer trips to stores. When they shop, they're often filling up baskets with food and essentials or using contactless options, such as home grocery delivery or curbside pickup.
Shopping patterns at Target have changed during the pandemic, too. Customers bought less apparel and more groceries during the fiscal first quarter, which ended May 2. Food and beverage sales grew by more than 20% and apparel sales dropped by about 20% in the quarter.
Like other retailers, Target has seen a surge in online shopping. Digital sales grew by 141% in the first quarter, while same-day services — including its home grocery delivery service Shipt — grew by 278%.Â
In just three months, customers picked up more units through the retailer's drive up service than in all of 2019. Target had weeks in April when its drive up volume was seven times higher than normal and single days when the volume of order pickup in stores was twice as high as Cyber Monday, the company's CEO Brian Cornell said during the first-quarter earnings call.
Target has used the services to attract customers. About 40% of those who used drive up in the first quarter were new to the service, the company said.
However, the retailer's first-quarter profits were squeezed, as it sold fewer high-margin items and had higher labor costs. Cornell estimated at the time that the company had spent about $500 million on increased wages, employee benefits and store cleanings, including those that would be paid through July 4.
Target announced in March that it would add the fresh foods and alcohol to same-day services. Weeks later, it paused that plan and postponed additional store remodels and openings, as rising coronavirus cases sparked stockpiling.
The company is offering an assortment of adult beverages through drive up and order pickup at about 90 stores in Florida as part of a pilot.
Target already tested the addition of fresh and frozen foods near its headquarters in the Minneapolis area and in Kansas City. It will expand next in the Midwest and then in other regions, the company said in a news release.
By bulking up its same-day grocery assortment, Target will compete more directly with Walmart, Amazon and grocers that offer similar services. Walmart, the largest grocer in the country, has used groceries to fuel its e-commerce sales. Kroger, the country's largest supermarket chain, has lagged behind with its online grocery efforts, but had a 92% jump in the first quarter and is building warehouses to fulfill orders with British robotics company Ocado.
