To keep up with grocery giant Walmart and Amazon’s growing grocery focus, Target continues to build up its food supply chain, the Wall Street Journal reported this week.
Target, which used to rely on grocery wholesalers to keep its shelves full, now operates nine temperature-controlled food distribution centers and will open a 10th in Thornton, Colo., next year, according to the WSJ.
The goal is to keep grocery items in stock during peak shopping periods, Rick Gomez, chief commercial officer at Target, told the newspaper.
The Minneapolis-based retailer has struggled to find direction over the last few months, resulting in sluggish earnings reports. However, its food and beverage sales stood at $6.5 billion in the first quarter, up by low single digits year over year.
Target also announced this month that it would focus more on the consumer by offering a bigger assortment of goods and a faster delivery service.
Target ranked ninth in grocery sales in 2024 and fifth in online sales, according to data from research firm Numerator. The retailer trails Walmart, Amazon, and Kroger in the digital arena.
During its fourth-quarter earnings call in February, Walmart, which operates over 4,700 stores nationwide, reaffirmed its commitment to keep grocery prices low, especially for items like eggs, bacon, and ground beef. Grocery continued to be a standout category for the retail giant in the fourth quarter, registering mid-single-digit growth.
Walmart also debuted its Bettergoods private-label line in early 2024, featuring around 300 grocery products ranging from $2 to $15.
Amazon is restructuring the corporate teams for its grocery and convenience-store brands, which includes some layoffs, the company announced on Wednesday. Amazon operates more than a dozen Amazon Go stores across Seattle, Chicago, New York City, and Los Angeles, and operates 63 Amazon Fresh grocery stores. The online giant launched Amazon Grocery in Chicago last October.
