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Target takes Fresh approach in Philly

August 19, 2009

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Target Corp., MInneapolis, is planning to get fresh in Philadelphia, adding about 30 of its food-laden prototype stores to the market.

Target has been introducing P-Fresh stores -- both as conversions and new stores -- as the company boosts its presence in the food business. In a conference call today, Kathryn Tesija, executive vice president, merchandising, said the Philadelphia expansion of the P-Fresh format will occur over the next two months. Store conversions should begin imminently.

While the addition of perishables, particularly meat and produce, has gained the P-Fresh format notoriety, the overwhelming bulk of the food offering in the stores is refrigerated and frozen, with a heavy private label presence balanced by major national brands. Already, Target is operating more than 40 of the P-Fresh stores and plans to add about 60 more in the first stage of the format’s roll out. Many have and will be in the Northeast – a new Target that opened in the New York City borough of The Bronx in July was a new, smaller variant of the P-Fresh format – where the company has no supercenter presence.

In the conference call, as transcribed by SeekingAlpha, Tesija noted, “Even while we’re experiencing price deflation on some food items, the grocery category continues to see positive comps overall benefiting from increased space and emphasis in our general merchandise stores and continued development of new products in our own brands, which now account for more than 20% of our food sales."

The move into Philadelphia is the next step in a long-term process that is transforming how Target positions its business.

 “We intend to incorporate this expanded food offering into a substantial portion of our chain over the next three years dramatically improving our ability to deliver the convenience of a one-stop shopping experience for our guests,” she said.



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