targetfreshfood.jpg Target Corp.
Target posted robust comp-store sales in produce, which is featured prominently in the company's new "next generation" unit in Richmond, Texas.

Produce, adult beverages boost Target food comps

Investments in freshness, organics, labor help drive produce sales in Q3

Target Corp. said Wednesday that food and beverage comparable-store sales were up slightly in the third quarter, including an increase in the “high single digits” in produce comp-store sales.

The Minneapolis-based retailer said it made investments in freshness, organics, in-stocks, labor and specialty items in the produce department.

“We continue to measure steady progress in food and beverage, and most encouragingly, we're seeing the strongest results where we've been investing,” said Mark Tritton, executive VP and chief merchandising officer, in a conference call with analysts discussing third-quarter results.

Target also said it saw double-digit comp-store sales growth in adult beverages, a category in which the company has been addressing assortment and presentation nationwide.

The food and beverage sales gains came despite headwinds from deflation in several categories and the company’s own pricing adjustments, Tritton said.

Target also said it is seeing sales lifts of 2% to 4% at remodeled stores, and has received “tremendous response” to its small-format locations., several of which opened in the third quarter. Earlier this week the company opened its first “next generation” store in Richmond, Texas, featuring a separate entrance for grocery, dedicated areas for in-store and curbside pickup and other enhancements.

Overall, Target reported comp-store sales gains of 0.9% for the third quarter, which ended Oct. 28. Net income was down 21%, to $480 million, on a 1.4% gain in sales, to $16.67 billion, compared with year-ago results.

The company issued what some reports described as a tepid holiday sales forecast, projecting fourth-quarter comps in the range of flat to 2% growth.

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