Target Executives Happy With PFresh Performance

Gregg W. SteinhafelMINNEAPOLIS — Target Corp. [4] here seems to be satisfied with the PFresh concept it introduced three years ago.

Gregg W. Steinhafel [5] (right), chairman, president and chief executive officer, told investors the stores it converted in 2011 have had “good results,” with PFresh sales expanding beyond the food categories “into more crossover and commodity categories. And as we move into year three, we’re starting to see the increase in the discretionary categories that we had planned for over time.

“So we’re on track and continue to feel really good about where we are with PFresh.”

Over the last three years Target has expanded its food offering by adding PFresh sections at about 875 stores scattered all over the U.S., or 60% of its discount store base (excluding about 250 SuperTargets).

Impact of Target PFresh Seen as Minimal [6]

After converting 400 stores last year, the company said it plans to convert another 230 stores this year, about half of the discount stores remaining — a slowdown that will allow Target to focus time and resources on converting the Zellers stores it acquired in Canada to the Target banner, all of which are expected to have PFresh sections.

In the U.S. it added fresh offerings to 100 stores in March, with 90 more conversions planned for late June and 40 more in October.

Target Picks Up Incremental Market Share [7]

“We feel 230 is the appropriate number [to convert] in 2012,” Steinhafel said earlier this year.

Up until now, the company has been expanding grocery offerings in the U.S. by converting high-volume stores in urban and suburban locations, he said, “and we believe this [slower] cadence is more appropriate as we go forward into some of our mid- and lower-volume stores.”