The grocery store industry is in the midst of a major transformation. Target is the most recent retailer to make changes to its business in this changing landscape.
Thanks to Amazon’s purchase of Whole Foods and its promise to lower food prices, the grocery world is following suit to stay competitive.
Shoppers have significantly increased their visits to Whole Foods since Amazon announced a slash in prices. Target is hoping to draw them back into its grocery section with wide-scale price lowering.
In a blog post on the company’s site, Target announced that it had lowered prices on a variety of items, including “cereal and paper towel to baby formula, razors, bath tissue, and more.”
The slash in prices should not be confused with a company-wide sale. Target is hoping to focus its grocery selection around lower everyday prices. Shoppers will still be able to find items on sale, but they will be from the new prices.
To combat the price decrease, Target has gotten rid of more than two-thirds of discount sale signs and labels, known as “price and offer call outs.”
According to Target’s executive vice president and chief merchandising officer Mark Tritton, Target is moving towards “a focus on offering the right price every day and simplifying our marketing to make great, low prices easy to spot.”
The cutting of “price and offer call outs” does not mean that Target is removing sales from its business plan.
Tritton said, ” We want our guests to feel a sense of satisfaction every time they shop at Target.
Part of that is removing the guesswork to ensure they feel confident they’re getting a great low price every day.”
Investors have not been impressed with the move. With major worries about the company’s profit margin, share prices fell 3 percent following the announcement.
Target hopes that it can use the new approach to fend off Wal-Mart and Amazon.