Targets Pfresh Grocery Growth Strategy Baking Pfresh Targets

Target’s Pfresh Grocery Growth Strategy Baking

Pfresh § Target’s Grocery Strategy § What is Pfresh? § Rollout plans § What this means for you § Future information

Target’s Grocery Strategy § § Drive Frequency and Guest trips Communicate Value Increase overall basket size Dedication of Target resources for Grocery § $3 billion capital investment by TGT § Realization of margin mix pressure as grocery outpaces other areas in Target.

What is Pfresh? § Pfresh is a new store prototype that will change the way the Target guest shops for groceries. § Have the items that our guest needs to complete her grocery shopping list, making Target a viable option for her “fill-in” grocery trip. § The assortment will be focused on category breadth and will offer a selection of high-frequency perishable items; comprehensive dry, dairy and frozen food assortments; and expanded convenience foods in snacks and beverages.

What is Pfresh Cont. § Increased grocery space: 24/38 current sides of food to 55 sides in a Pfresh. Up to a 129% increase in space. § Extremely visible store location, able to be seen from the checkout lines. § In-store signage and an external media campaign will help drive store traffic.

Pfresh Photos

Pfresh Photos Cont.

Pfresh roll-out plans § Plan to roll-out approximately 1, 000 stores within the next 3 years. § Target will use a “market blitz” approach for converting the stores. This means Target will focus its efforts on converting entire markets over rather than isolated openings. § The market blitz strategy will allow our marketing department to make larger statements in these markets. § In 2010 our focus will be on high volume markets

What this means for you § During our upcoming line review we would like to have discussions surrounding: § Recommendations on Pfresh assortment § Volume impact and cost structure § Supply chain opportunities § Scans and volume rebates § Our goal is to have the right items for the guest at a blended margin that allows Target to continue to expand this format.

Future Information § Feel free open the attachment below to read what the press has been saying about Pfresh.