Target Corporation: The Grocery Business in the Bull's Eye
(5 pages of text)
Case (Pub Mat)
In May 2016, Target Corporation was one of America’s largest retail chains, with nearly 2,000 well-located general merchandise stores and a reputation for being stylish and chic. However, in the wake of the 2008 U.S. financial recession, profitability had weakened as a result of allocating more space to low-margin groceries in an attempt to continue to attract customers. Once the recession was over, Target Corporation had to decide whether to reduce or even eliminate the grocery category in order to offer a broader selection of clothing and household goods.
This case is best positioned towards the end of an MBA core marketing course, early in MBA and undergraduate retailing electives, and/or in undergraduate marketing courses as an introduction to retailing and to the intense competition in the grocery category that results in low return on sales. After completion of the case, students will understand the following:
- Marketing strategy decisions involve choices.
- Sticking with groceries involves a decision to offer less non-food merchandise.
- Merchandise mix is a strategic decision for retailers.
- Grocery sales are highly competitive with many shifting competitors.
- Many competitors in the U.S. grocery market are not traditional supermarkets and have unique characteristics and needs.
United States, Large, 2016
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