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Despite being among the largest retail corporations in the United States, Target does not demonstrate outstanding performance in terms of its grocery business. The subjective assessment of Target’s grocery stores’ value for the customer can be conducted using the following simplified equation: V=B-S. V represents value, whereas B and S stand for perceived benefits and perceived sacrifice, respectively. Regarding the perceived benefits, Target’s groceries can appeal to long-standing clients who have time to cook from scratch and busier customers by offering both frozen and fresh alimentary products (Robinson, 2019). However, as a new study by Marketforce Information (2017) indicates, only 56% of customers positively evaluate Target’s grocery stores in terms of store cleanliness, but the chain is not among the best retailers when it comes to product availability. Next, as for the sacrifice, shopping for groceries can be time-consuming for Target’s customers – less than 50% of consumers report the ease of finding the necessary items (Marketforce Information, 2017). Next, regarding financial sacrifice, 49% of customers suppose that Target’s grocery sections offer a good value for money, which is twice as small as the result of the best chain store in the rating (Marketforce Information, 2017).
Based on the information above, Target’s value for customers is mainly based on the presence of different categories of alimentary products. However, from the customer-perceived value for money, it does not seem that clients are satisfied with product quality and the corporation’s pricing decisions. Unattractive prices and stock-outs have already been cited as the main reason for Target’s failure in Canada (Robinson, 2019). The factors contributing to Target’s poor performance in the grocery business are the relatively low returns on sales, the inability to compete with larger grocery stores, and the essential difficulties of selling perishable goods (Robinson, 2019). As for the factors that make Target different from competitors, such as Walmart, they include smaller shop sizes and cheaper groceries (Marketforce Information, 2017; Robinson, 2019).
- Marketforce Information. (2017). New Marketforce Information study finds Publix and Wegmans are America’s favorite grocery stores.
- Robinson, D. (2019). Target Corporation: The grocery business in the bull’s eye. Richard Ivey School of Business Foundation.
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