The British Are Coming ... to Target: Chicago CityTarget to Include Pret A Manger Fresh-Prepared Foods Shop; Los Angeles, San Francisco and Seattle Likely

News/Analysis/Commentary

Fresh-prepared foods merchandising and retailing continues to get more interesting - and increasingly competitive - in the United States.

Today discount retailing giant Target Corp. announced it has inked a deal with the London, UK-based fresh-prepared foods retailer Pret A Manger to put one of its Pret shops in what will be one of Target's first four smaller-format (60,000-100,000 square-feet,) urban CityTarget stores - the store at the Sullivan Center in Chicago's Loop, which is set to open in July 2012. The Chicago CityTarget store will be about 100,000 square-feet.

Pret A Manger, which means "ready-to-eat" and has free-standing shops in New York City, Washington D.C. and Chicago in the U.S., along with in the UK and Hong Kong, prepares a variety of ready-to-eat  fresh foods daily in-store. Its offerings include sandwiches, salads, soups, sushi, meals, snacks, desserts and more. (See the menu here.)

San Francisco's Metreon Center, shown in the rendering above, is being completely remodeled to house the CityTarget store, which will take up the entire second floor of the center. The store, which will be about 100,000 square-feet, is set to open in mid-2012. The location is an excellent one geographically and demographically for a Pret A Manger shop. [Artist's rendering: Westfield Group.]

The other three CityTarget units, all on the west coast in downtown Los Angeles, San Francisco (in the Metreon Center in the South of Market District) and Seattle, are also set to open next year as well.

As we reported last year, Target also says it plans future CityTarget stores (10 total to start including the four above) in New York City, Boston, Miami, and Baltimore. [See - September 24, 2010: Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012.]

All of the CityTarget stores will feature Target's "P-Fresh" food and grocery stores inside, which include an assortment of fresh produce, meats, perishables, frozen foods and packaged groceries.

"We believe Pret A Manger will help us provide guests in downtown Chicago with the exceptional, complete shopping experience they have come to expect from Target," Annette Miller, the retailer's senior vice president-grocery, said in making the announcement today. "Our Chicago CityTarget guests can pop in for a fresh sandwich or salad during their regular visits to our store for groceries or apartment essentials."

Target's announcement today about its partnership with the privately-held British fresh-prepared foods chain, which burger giant McDonald's once owned about a third of, was exclusive to the Chicago CityTarget store.

"We have no other plans in place today for adding Pret A Manger to other CityTarget stores, but we're excited for the potential for that over time," Miller said. "Pret A Manger doesn't have a presence on the West Coast today. That is one reason the partnership is just in the Chicago store."

However, earlier this year a good source told us Pret A Manger is looking to the West Coast, specifically San Francisco, Seattle and Los Angeles, three big cities with strong demographics that fit the retailer well (think demographics similar to those of Starbucks and Whole Foods Market) for its next strategic move.

The UK-based fresh-prepared foods retailer started out in the U.S. in 2000 in New York City, followed by launching in Washington D.C. (in 2009) and most recently (last year) in Chicago. There are currently 250 shops globally. Sales last year were about $530 million, according to Pret A Manager.

Therefore, based on the information we have, we expect to see what will be the store-within-a-store shops - the Pret A Manger in the Sullivan Center-Chicago CityTarget store will be about 2,500 square-feet - in the San Francisco, Los Angeles and Seattle CityTarget stores, if not right away when the units open next year, fairly soon after.

Soups, salads, sandwiches and drinks from Pret A Manger.

In our analysis the move is a smart one for both Target and Pret A Manager. It also could open the door for Target to add the fresh-prepared foods' shops in some of its Target discount stores where it's been adding the "P-Fresh" fresh food and grocery markets in west coast regions and neighborhoods that make sense, such as in parts of the San Francisco Bay Area, Southern California and metro and suburban Seattle, Washington.

Target is also opening a second store in San Francisco next year. That store will not be a CityTarget but instead an about 120,000 square-foot discount store. It will include a "P-Fresh" market inside. The location, in a small shopping center near the private, Jesuit-run University of San Francisco, has good demographics to support a Pret A Manger shop as well. The two stores will be Target's first in San Francisco.

Target has Starbucks units inside many of its stores. So in terms of demographics, one can look at the top-performing in-store Starbucks cafes and begin to get a good idea of which Target discount store locations might do well with Pret A Manger shops inside, should the partnership between the two retailers blossom beyond CityTarget.

Pret A Manger's prepared foods offerings fit well with the profile of the Target shopper, which is majority female, higher income as compared to Walmart shoppers, for example, and more upscale-oriented while still searching for value.

Therefore in our analysis this partnership has the potential to grow significantly. It gives target a high-quality and extensive fresh-prepared foods offering in its stores to go along with its "P-Fresh" markets while giving Pret A Manger a way to expand into new markets without having to acquire its own standalone shops, which can be an expensive proposition in places like San Francisco and Seattle.

This is a development worth watching closely, particularly since Target is adding "P-Fresh" units to hundreds of its about 1,762 U.S. discount stores (located in 49 states) each year.

Already, about half the units have the grocery markets inside. Over the next three years Target says it plans to have the fresh food and grocery offerings in up to 75% of its discount stores.

Having a fresh-prepared foods offering as a companion to "P-Fresh" in many of those stores has the potential to be a powerful one-two punch for Target, along with turning up the heat when it comes to fresh-prepared foods merchandising and retailing in the respective markets where it might add the Pret A Manger shops.

As a result, based on what we've learned from our sources, combined with what we learned earlier this year about Pret A Manger and its expansion desires and future plans, it's our analysis Target and Pret A Manger, although they plan to take the new partnership at a slow but steady pace, are already thinking far beyond the single store in Chicago, starting with the three CityTarget stores opening in Los Angeles, San Francisco and Seattle next year, and if all goes well looking far beyond that.

We could be seeing the makings of a very interesting Anglo-American food retailing partnership featuring London-based Pret A Manger ready-to-eat fresh food shops located inside selected Target stores. The debut will come in July of next year when the first one opens in the new smaller-format urban CityTarget store in Chicago.

Related Stories

January 13, 2011: Today's Target-Zellers Deal and 'The Neighbourhood Market'-'P Fresh' Food & Grocery Markets Connection

December 16, 2010: New Retail Center Would Bring Ralphs Supermarket, Target Store to South Los Angeles' Crenshaw Corridor

November 9, 2010: Bullseye: Target Goes From Zero-to-Eighty-Seven 'P-Fresh' Food Markets in Southern California in Under Two Years

October 11, 2010: Target Hits Once-in-Century Date Bulls Eye: Opens Ten New Stores On Sunday 10-10-2010

September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California

September 24, 2010: Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012

May 11, 2009: Target on Tap to Put Mini-Grocery and Fresh Foods Markets Into 100 Target Discount Stores This Year; Many More Likely to Come in 2010

November 19, 2009: Competitor News: Target Corp. Planning to Dramatically Expand Food and Grocery Offerings in All of its U.S. Target Discount Format Stores

July 9, 2008: Southern California Market Report: Five Supermarkets; A New Fresh & Easy, Wal-Mart and Super Target Will All Compete in Hesperia Food Retailing Rodeo

Today's Target-Zellers Deal and 'The Neighbourhood Market'-'P Fresh' Food & Grocery Markets Connection

Analysis/Commentary

Readers of Fresh & Easy Buzz know we frequently report on, write about, and analyze Minnesota-based retailer Target Corp., particular as it pertains to its fairly new fresh food and grocery initiative, "P-Fresh.

"We're avid and aggressive "Target Watchers."

Our coverage of Minneapolis-based Target includes an ongoing research project in which we've been tracking, identifying, reporting on and writing about the growth of the chain's in-store "P-Fresh" food and grocery markets, which the retailer has been adding to many of its 1,500-plus discount format stores in the U.S., beginning in 2009.

Target Corp. has two retail formats: Its discount stores, which are the majority of its units, and its SuperTarget format stores, which are similar in size to a Walmart supercenter and include a full supermarket inside, like Walmart's supecenter format.

Target, which is the second largest retailer in the U.S. after Walmart Stores, Inc., currently has "P-Fresh" fresh food and grocery markets inside about 350 of its U.S. discount format stores, and plans to add the markets to another 400 units this year. And, as we pointed out here in 2010, California is the leading U.S. state in terms of the number of its discount stores, out of the 350, Target has added the "P-Fresh" units inside of over the last nearly two years. Over 100 of the 350 "P-Fresh" units are in California.

Because we're avid and aggressive "Target Watchers" here at Fresh & Easy Buzz, the retailer's announcement today that it's buying leasehold interests in up to 220 Zellers discount store locations in Canada, for $1.85 billion, didn't come as a surprise to us in the least bit.

Zellers is a discount/mass-merchant store format that's similar to Target's discount store format.

Target CEO Gregg Steinhafel said in a statement today the retailer plans to open 100 -to- 150 stores across Canada in 2013 and 2014.

It will renovate some of the Zellers locations, at an estimated cost of more than $1 billion, he said. Other Target stores in Canada will be built from-the-ground-up. Target announced its plans to enter Canada last year. [You can read today's announcement from Target Corp. here. Zellers' parent company, Canada's Hudson's Bay Company (HBC), also issued a statement on the deal today here.]

No surprise

Why weren't we surprised by today's announcement? Because Target Corp.'s interest in Zellers, which is owned by Canada's oldest company, Hudson's Bay Company (HBC), isn't a recent phenomenon. Target looked into acquiring the entire Zellers chain, and had talks with HBC's management at least as far back as 2006-2007.

The discussions between the Target Corp. and HBC/Zellers folks obviously didn't result in a deal back then for a number of reasons. One reason being Target Corp. determined at the time that the timing wasn't right for it to either enter Canada or make such a major acquisition. Target announced its plans to enter Canada last year.

However, the relationships formed at that time continued, right up until now. And although no deal was done back then, Target didn't walk away from its research on and investigation in Zellers empty-handed.

Zellers' 'The Neighbourhood Market'

One of the things Target executives found interesting when they toured Zellers stores, was that the general merchandise retailer was testing a concept in a few of its stores called "The Neighbourhood Market," a fresh food and grocery store-within-a-store.

Zellers, which first tested its in-store markets in 2000-2001, currently has "The Neighborhood Market,"which ranges in size from about 5,000 -to- 10,000 square-feet depending on the particular store its in, in 90 of its discount stores, located in a variety of provinces in Canada. [Click here to see the locations of the Zellers stores with "The Neighbourhood Market".]

The Canadian retailer's policy over the last few years has been to add the food and grocery markets inside every new discount store it builds and every existing store it remodels, which is something is started doing in 2002.

Pictured above: A "P-Fresh" in-store food and grocery market, located in a Target discount store in California. Pictured Below: An in-store "The Neighbourhood Market," in a Winnepeg, Canada Zellers' store. Note: Take a look at the near-identical departmental circular ceiling signs, at the top in both photographs. Kissing cousins.
The in-store markets, which are located in the front of the stores, offer a limited assortment of fresh foods - produce, meats, baked goods, dairy/deli, prepared foods - and shelf-stable packaged food and grocery items, just like Target's "P-Fresh" and Tesco's 10,000 square-foot Fresh & Easy Neighborhood Market stores in the U.S., the first of which opened in November 2007. There are currently 156 Fresh & Easy stores in California, Nevada and Arizona. The Tesco Fresh & Easy stores are freestanding units, however, not stores-within-stores, like Target's and Zellers' concepts are.

Zellers had its "The Neighbourhood Market" concept inside a number of its discount stores in Canada well before 2007 (by 2003-2004), however. In fact, word is Tesco did some scouting around in Canada, as well as the research it did in the U.S., prior to creating Fresh & Easy Neighborhood Market.

Fact: Tesco's original name for the chain was "Fresh & Easy Community Markets." But the United Kingdom-based retailer changed "Community" to "Neighborhood" sometime in 2006-2007.

Observation: If you're wondering why Zellers uses the British spelling and French English-usage spelling of "Neighbourhood," rather than using the North American spelling, "Neighborhood," a little research into the origins of Zellers parent company, Hudson's Bay, which is Canada's oldest company and the largest general merchandise retailer in the country, among other things, will make the choice of spelling clear. Also: Although English is the majority language, Canada officially remains a dual (English-French) language nation.

Kissing cousins

Target opened its first "P-Fresh" in-store markets in mid-to-late 2009.

Zellers has been adding its "The Neighbourhood Market'" to its department stores at a fairly rapid pace over the last few years. It has the markets in 90 of its discount stores so far. [Click here to see a list of Zellers stores that include the fresh food and grocery markets.]

Target executives first saw Zellers' food and grocery concept up-close a few years ago. Also keep in mind that Minnesota, where Target Corp. is headquartered, is really close to Canada.

Target created its "P-Fresh" concept and initiative - a fresh food and grocery store-within-a-store inside their Target discount format stores - in late 2008 and launch it in 2009. The "P-Fresh "stores" are much larger than Zellers' in-store markets, nearly three times the size. Both retailer's markets feature the same product categories. Target though offers a much more extensive number of SKUs than does Zellers. But the model is identical.

Additionally, Target's in-store "P-Fresh" signage and related graphics look very close to what Zellers uses - and it was first, remember - with its "The Neighbourhood Market."

Armed now with the information in this story, If you go visit a Target discount store in the U.S. that has a "P-Fresh" inside, then go visit a Zellers store in Canada, with a "The Neighbourhood Market" inside - we bet you'll see the connection - and perhaps even say: "Kissing cousins, they are."

The deal

Target is a better overall retailer, including in the food and grocery segment - although Target has plenty of room to get better at grocery merchandising - than Zellers is.

Target's format and stores are also much better overall.

Zellers has been remodeling some of its discount stores in Canada over the last couple years. But many consumers in the country feel the retailer has become outdated, both in how the stores look and how they are merchandised. And the rapid growth of Walmart-Canada has taken a toll on Zellers, which before Walmart headed north from the U.S. was the first-choice of many Canadian shoppers. In many parts of Canada, Walmart-Canada has made Zellers the second...or even third choice for many Canadian shoppers.

Under the terms of the deal, Target plans to make payments to HBC/Zellers for the leases through 2011. Zellers will sublease the sites from Target and keep running stores under its own banner "for a period of time," Target and HBC/Zellers said in the statements today. A good translation of "for a period of time" is: Once Target takes over all of the Zeller's stores out of the 220 it intends to in the 2013-2014 time period, the Zeller's chain and banner will cease to exist in Canada or anywhere else.

In our analysis the deal is a good one both for Target and for HBC/Zellers. Canadians travel to the U.S. regularly because of the close proximity of the two countries. After all, you can drive from parts of Canada into parts of the U.S. - like Minnesota - faster than you can fly from the west coast to the east coast. Many are very familiar with Target.

And, of course, we aren't suggesting Target wants Zellers for its in-store food and grocery markets. They are merely part of the package. It's a back story - and a connection not mentioned in any of the many stories being published on the deal.

Kissing Cousins united

Lastly, now that you know about the Target-Zellers in-store fresh food and grocery market connection, we're betting you know what we're going to tell you next?

Well... It's simply that Target's "P-Fresh" fresh food and grocery markets are going to be in all or most of those up to 150 stores it plans to open in Canada in 2013-2014, including the Zellers stores it takes over, along with any stores it builds from scratch.

And now you know...'The rest of the Target Corp.-HBC/Zeller's deal story.' Or at least the back story, as it pertains to food and grocery merchandising and retailing.

New Retail Center Would Bring Ralphs Supermarket, Target Store to South Los Angeles' Crenshaw Corridor

Above and below: Two views of the three-level, 300,000 square-foot "District Square" retail center/mall planned for Crenshaw Boulevard and Rodeo Road, achored by a Ralphs supermarket and Target discount format store. The Ralphs and target are at the far right. Click on the renderings to enlarge. [Credit: Charles Company.]

Southern California Market Region

[Related Story - December 16, 2010: City Council Approves Crenshaw-South Los Angeles Fresh & Easy Neighborhood Market Store Despite Opposition]

Tesco's Fresh & Easy Neighborhood Market isn't the only food and grocery retailer coming to Crenshaw Boulevard in south Los Angeles.

Developer Charles Company is working on bringing a Ralphs supermarket and a Target store, which would have one of its "P-Fresh" fresh food and grocery stores inside, to a new development, "District Square," on a six acre site at the corner of Crenshaw Boulevard and Rodeo Road in south Los Angeles. Ralphs, which is the leading grocery chain in Southern California, is owned by Kroger Co.

In addition to the Ralphs supermarket and Target store, the planned $93 million, three-level, 300,000 square-foot urban retail center, which is near Los Angeles' new Exposition Light Rail Line and the popular West Angeles Cathedral, is to include stores from off-price apparel retailers Marshall's and Ross Dress for Less, along with other retail stores and restaurants, including a Chuck E Cheese.

There is an existing Ralphs supermarket at the site. It would be demolished and a new store built on the ground-level of the 300,000 square-foot urban mall/shopping center.

The Target store would be on top level, along with a parking lot, as you can see in the architect's rendering above.

Under the plans, the City of Los Angeles is providing about 30% of the developer financing, using a federal HUD loan, along with funds from the city's Community Redevelopment Agency. There would then be a revenue sharing scheme that would see a percentage of sales tax money from the new center being used by the city to pay off the loans, rather than going into its general fund.

With two Fresh & Easy stores on Crenshaw Boulevard on the way [See -December 16, 2010: City Council Approves Crenshaw-South Los Angeles Fresh & Easy Neighborhood Market Store Despite Opposition], as well as the new Ralphs and Target stores planned for the "District Square" retail center, the Crenshaw corridor in south Los Angeles, which is underserved by grocery stores offering fresh foods and groceries at reasonable prices, is about to get a food retailing shot in the arm, providing a little added shopping sustenance for residents of the Crenshaw "food desert," added sales tax revenue for the City of Los Angeles, and competition between three food retailers - Fresh & Easy, Ralphs and Target - in a part of the city that's long been trying to lure more grocers.

Related Stories

November 9, 2010: Bullseye: Target Goes From Zero-to-Eighty-Seven 'P-Fresh' Food Markets in Southern California in Under Two Years

September 24, 2010: Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012

December 10, 2010: Fresh & Easy Neighborhood Market CEO Tim Mason Says 70 New Stores Possible in Los Angeles Area

July 11, 2008: 'Food Desert' Neighborhoods and Southern California: More on the Fresh & Easy Store Planned For South Central Los Angeles

July 15, 2008: Fresh Food to Bloom in An Inner-City Food Desert: Tesco's Fresh & Easy Breaks Ground For New Store in Underserved South Los Angeles Neighborhood

Click here for a selection of stories and posts about the "food desert" issue

Bullseye: Target Goes From Zero-to-Eighty-Seven 'P-Fresh' Food Markets in Southern California in Under Two Years

Southern California Market Region Report

[Editor's Note: Fresh & Easy Buzz published Part 1 of our Target "P-Fresh" research report on September 26, 2010 - While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California - focusing on Northern California. Part 2 below focuses on the Southern California region.]

Can you guess the name of the retailer that's opened more new food and grocery "markets" in Southern California over the last 18 months than any of its competitors, and has managed to do so without opening more than a handful of actual new stores?

The answer: Target Corp.

Over the last 18 months, Minneapolis, Minnesota-based discount retailer Target has opened 87 of its 10,000-12,000 square-foot "P-Fresh" store-within-a-store fresh food and grocery markets inside 87 of its discount format stores throughout Southern California.

Target currently has 141 discount format stores in Southern California, which means, if it chooses, the retailer still has 54 existing units available to add additional "P-Fresh" fresh food and grocery markets in.

There are seven SuperTarget combination food-grocery-general merchandise stores in Southern California. The stores are similar to a Walmart supercenter in terms of product selection.

Target operates 246 stores in California and 1,752 stores in the U.S. The majority are discount format units.
Target plans on installing "P-Fresh" markets (pictured above) in a number of those remaining 53 Southern California discount format stores by the end of 2011, along with including the 10,000-12,000 square-foot fresh food and grocery markets in most if not all of the new discount format stores it opens in the region.

For example, on October 10, Target opened 10 new discount stores nationally. Two of the 10 new stores are located in Southern California - in Azuza and Simi Valley. Both include "P-Fresh" markets. [See - October 11, 2010: Target Hits Once-in-Century Date Bulls Eye: Opens Ten New Stores On Sunday 10-10-2010.]

Target is also developing one of its new-prototype, smaller-format stores in the 7+Fig mall in downtown Los Angeles.

The urban Target store, which will be about 90,000- 100,000 square-feet, will have a heavy emphasis on food, groceries and household basics, according to John Griffith, Target's executive vice president of property development. The store will be located in a combined space formerly occupied by Macy's and Bullock's department stores.

Target's discount format stores average about 130,000 square-feet. It's combination food and general merchandise SuperTarget stores are in the 175,000 square-foot range.

The downtown Los Angeles store is the second urban unit announced by Target. The first will be in Seattle, Washington. Both stores are set to open in 2012, according to Griffith.

In late September, 2010, as we reported in this story - September 24, 2010 - Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012 Target Corp. said it plans to have "P-Fresh" fresh food and grocery markets in 850, more than half, of its U.S. discount format stores by the end of 2011.

As a point of comparison, Target's 88 "P-Fresh" store-within-a-store units, which it's opened over the last 18 months, gives it nearly the same amount of fresh food and grocery "units" in Southern California as Tesco has with its current 92 stand-alone Fresh & Easy Neighborhood Market stores.

Tesco has opened the 93 Southern California Fresh & Easy units over a three-year period, starting with the first batch of stores it opened in the region in November 2007. There are 92 Fresh & Easy stores in Southern California. A store in Moreno Valley was closed this month. The Fresh & Easy markets average about 10,000 square-feet, very similar in size to Target's "P-Fresh" in-store markets.

Going beyond the comparison between Target and Tesco's Fresh & Easy to the larger Southern California region itself, Target Corp., with its 88 "P-Fresh" in-store markets, and Tesco, with its 92 small-format Fresh & Easy Neighborhood Market stores, have combined added the equivalent of 180 new 10,000 square-foot grocery stores to the region since late 2007. That's a whole lot of new grocery stores over a three year period, even for vast Southern California.

Further, the additional food and grocery retailing space added by Target and Tesco's Fresh & Easy is in addition to all of the new stores opened by the region's other food retailers - Kroger, Safeway, Walmart, Costco, Trader Joe's, Stater Bros., Albertsons, Whole Foods Market, Sprouts Farmers Market and numerous others - over the last three years.

To put it mildly, growing and intense hyper-competition is on the food and grocery retailing menu in Southern California. And Target Corp., which less than two years ago had only a scant few stores selling fresh food and groceries in the region, is on its way to becoming a player in Southern California.

Related Stories

October 11, 2010: Target Hits Once-in-Century Date Bulls Eye: Opens Ten New Stores On Sunday 10-10-2010

September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California

September 24, 2010: Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012

May 11, 2009: Target on Tap to Put Mini-Grocery and Fresh Foods Markets Into 100 Target Discount Stores This Year; Many More Likely to Come in 2010

November 19, 2008: Competitor News: Target Corp. Planning to Dramatically Expand Food and Grocery Offerings in All of its U.S. Target Discount Format Stores

Below are the 87 Southern California Target discount stores with "P-Fresh" fresh food and grocery markets inside:

Anaheim
101 S Euclid St
Anaheim, CA 92802

Anaheim Hills
8148 E Santa Ana Canyon Rd
Anaheim, CA 92808

Azusa
809 N Azusa Ave
Azusa, CA 91702

Baldwin Park
3100 Baldwin Park Blvd
Baldwin Park, CA 91706

Brea
855 E Birch St
Brea, CA 92821

Buena Park
7530 Orangethorpe Ave
Buena Park, CA 90621

Burbank
1800 W Empire Ave
Burbank, CA 91504

Los Angeles Topanga
6700 Topanga Canyon Blvd
Canoga Park, CA 91303

Carson
651 W Sepulveda Blvd
Carson, CA 90745

Carson North
20700 S Avalon Blvd Ste 750
Carson, CA 90746

Cerritos
20200 Bloomfield Ave
Cerritos, CA 90703

Cerritos West
11525 South St
Cerritos, CA 90703

Chula Vista Broadway
1240 Broadway
Chula Vista, CA 91911

Chula Vista East
910 Eastlake Pkwy
Chula Vista, CA 91914

Compton-Rancho Dom
1621 S Alameda St
Compton, CA 90220

Costa Mesa
3030 Harbor Blvd Ste A
Costa Mesa, CA 92626

Culver City
10820 Jefferson Blvd
Culver City, CA 90230

Culver City South
6000 Sepulveda Blvd
Culver City, CA 90230

Cypress
6835 Katella Ave
Cypress, CA 90630

Diamond Bar
747 Grand Ave
Diamond Bar, CA 91765

Duarte
1050 Huntington Dr
Duarte, CA 91010

El Cajon
250 Broadway
El Cajon, CA 92021

Rancho San Diego
2911 Jamacha Rd
El Cajon, CA 92019

Escondido
1280 Auto Park Way
Escondido, CA 92029

Fullerton South
200 W Orangethorpe Ave
Fullerton, CA 92832

West Fullerton
1893 W Malvern Ave
Fullerton, CA 92833

Gardena
2169 W Redondo Beach Blvd
Gardena, CA 90247

Glendale
2195 Glendale Galleria
Glendale, CA 91210

Granada Hills
11133 Balboa Blvd
Granada Hills, CA 91344

Hawthorne
2700 W 120th St
Hawthorne, CA 90250

Huntington Beach East
9882 Adams Ave
Huntington Beach, CA 92646

Inglewood
3471 W Century Blvd
Inglewood, CA 90303

Irvine
3750 Barranca Pkwy
Irvine, CA 92606

Irvine North
13200 Jamboree Rd
Irvine, CA 92602

Irvine Spectrum
115 Fortune Dr
Irvine, CA 92618

La Habra
1000 W Imperial Hwy
La Habra, CA 90631

Grossmont
5500 Grossmont Ctr Dr
La Mesa, CA 91942

Laverne
2462 Foothill Blvd
La Verne, CA 91750

Lake Elsinore
18287 Collier Ave
Lake Elsinore, CA 92530

Lakewood Center Mall
141 Lakewood Center Mall
Lakewood, CA 90712

Long Beach Bellflower
2270 N Bellflower Blvd
Long Beach, CA 90815

Long Beach NW
6750 Cherry Ave
Long Beach, CA 90805

Los Angeles
3535 S La Cienega Blvd
Los Angeles, CA 90016

Los Angeles Eagle Rock
2626 Colorado Blvd
Los Angeles, CA 90041

Los Angeles Eagle Rock
2626 Colorado Blvd
Los Angeles, CA 90041

Mission Viejo
24500 Alicia Pkwy
Mission Viejo, CA 92691

Mission Viejo N
25601 Jeronimo Rd
Mission Viejo, CA 92691

Natl Cty Pl Bonita
3060 Plaza Bonita Rd
National City, CA 91950

Northridge
8840 Corbin Ave
Northridge, CA 91324

Northridge
8999 Balboa Blvd
Northridge, CA 91325

Norwalk
10600 Firestone Blvd
Norwalk, CA 90650

Norwalk East
12051 Imperial Hwy
Norwalk, CA 90650

Oceanside
2255 S El Camino Real
Oceanside, CA 92054

Orange
2191 N Tustin St
Orange, CA 92865

Pasadena
777 E Colorado Blvd
Pasadena, CA 91101

Pasadena East
3121 E Colorado Blvd
Pasadena, CA 91107

Pico Rivera
8800 Whittier Blvd
Pico Rivera, CA 90660

Rancho Santa Margarita
30602 Santa Margarita Pkwy
Rancho Santa Margarita, CA 92688

Redondo Beach
1601 Kingsdale Ave
Redondo Beach, CA 90278

Rosemead
3600 Rosemead Blvd
Rosemead, CA 91770

Puente Hills
17751 Colima Rd
Rowland Heights, CA 91748

Balboa
5680 Balboa Ave
San Diego, CA 92111

Lemon Grove
3424 College Ave
San Diego, CA 92115

San Diego Mission Valley
1288 Camino Del Rio N
San Diego, CA 92108

San Dimas
888 W Arrow Hwy
San Dimas, CA 91773

San Pedro
1701 N Gaffey St
San Pedro, CA 90731

Santa Ana
1330 E 17th St
Santa Ana, CA 92705

Santa Fe Springs
10621 Carmenita Rd
Santa Fe Springs, CA 90670

Santee
9846 Mission Gorge Rd
Santee, CA 92071

Seal Beach
12300 Seal Beach Blvd
Seal Beach, CA 90740

Signal Hill
950 E 33rd St
Signal Hill, CA 90755

Simi Valley West
51 Tierra Rejada Rd
Simi Valley, CA 93065

South Gate
5700 Firestone Blvd
South Gate, CA 90280

Torrance
3433 Sepulveda Blvd
Torrance, CA 90505

Tustin
2300 Park Ave
Tustin, CA 9278

Van Nuys
5711 Sepulveda Blvd
Van Nuys, CA 91411

Van Nuys North
14920 Raymer St
Van Nuys, CA 91405

Vista
1751 University Dr
Vista, CA 92083

Vista South
3150 Business Park Dr
Vista, CA 92081

West Covina
2831 E Eastland Ctr Dr
West Covina, CA 91791

West Covina South
2370 S Azusa Ave
West Covina, CA 91792

West Hills
6635 Fallbrook Ave
West Hills, CA 91307

West Hollywood
7100 Santa Monica Blvd Ste 201
West Hollywood, CA 90046

Westminster
16400 Beach Blvd
Westminster, CA 92683

Westminster NW
200 Westminster Mall
Westminster, CA 92683

Whittier
15614 Whittwood Ln
Whittier, CA 90603

Woodland Hills
20801 Ventura Blvd
Woodland Hills, CA 91364

Total = 87 units

Target Hits Once-in-Century Date Bulls Eye: Opens Ten New Stores On Sunday 10-10-2010

Target Corp. took advantage of a once-in-a-century opportunity yesterday, 10-10-2010, to officially open a whopping 10 new U.S. discount format stores. Yesterday's date combination only comes around once every 100-years.

All of the new Target units had limited soft openings beginning a few days earlier. However, yesterday was grand opening day at the 10 stores, which range in size from about 138,000 -to- 150,000 square-feet, and span the country, stretching from California and Utah in the west, to Arkansas and the east coast. Target says the opening of the 10 stores created about 2,400 new jobs.

The 10 stores feature Target's 'P-Fresh' fresh food and grocery sections inside. Additionally, because they are new stores, some of the 'P-Fresh' sections are bigger than the normal 10,000-12,000 square-foot size. The new units opened yesterday also include in-store Starbucks coffee bars, prepared food and beverage-focused Target Café's, and in-store pharmacies.

Five of the 10 new stores are in California - two units in Southern California, two in Northern California, and one in Bakersfield in the Central Valley. The locations of 10 new stores are:

>Sacramento East: 6507 4th Ave., Sacramento, Calif.
>Simi Valley West: 51 Tierra Rejada Rd., Simi Valley, Calif.
>Bakersfield Central: 2901 Ming Ave., Bakersfield, Calif.
>San Jose North: 95 Holger Way, San Jose, Calif.
>Azusa: 809 Azusa Ave., Azusa, Calif.
>Salt Lake City: 1110 S. 300 West, Salt Lake City, Utah
>Little Rock University: 420 S. University Ave., Little Rock, Ark.
>Christiana: 800 Christiana Mall, Christiana, Del.
>Flushing: 4024 College Point Blvd., Flushing, N.Y.
>Braintree: 250 Granite St., Braintree, Mass.

The fact five of the ten new Target stores opened on 10-10-2010 are in California is far from a coincidence. Rather, it reflects the significant strategic commitment the retailer has to the state and its various regions.

There are now 249 Target discount format stores in California - 175 in Southern and Central California and 74 in Northern California.

A little over half of the California stores currently have 'P-Fresh" (pictured above) fresh food and grocery markets inside. However, Target is adding them to a significant percentage of the remaining stores rapidly, as part of its program to have the markets in 850 of its now 1,600 U.S. discount format stores by the end of 2011. [Read our September 24, 2010 piece: September 24, 2010: Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012.]


For example, the new Simi Valley, California store is the first Target discount store in Ventura County to have a 'P-Fresh' which offers fresh produce, meats, perishable and frozen foods, pre-packaged baked goods, and packaged food/grocery items. There's an existing Target in Simi Valley, opened in 1986, but it doesn't include the in-store grocery market.

In Utah, the new Target discount store in Salt Lake City is the first unit of its kind in the state to feature a 'P-Fresh' market. However, Target has over a dozen of its Super Target combination supermarket/general merchandise stores in Utah, so the state's shoppers are very familiar with the retailer's approach to selling fresh food and groceries.

At the other end of the spectrum in Northern California, the new Target discount store in Sacramento makes 13 for the retailer in the metro region. And all 13 of the stores have 'P-Fresh' markets inside, as we detailed here: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California.

The situation is similar in San Jose. Target now has 'P-Fresh' fresh food and grocery markets in eight discount stores in San Jose. See the story linked above. Also see - September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California

In terms of 'P-Fresh' size, the new Target in Braintree, Massachusetts opened on Sunday has one of the larger fresh food and grocery store-within-a-store sections to date. The Braintree 'P-fresh' has 20 aisles of groceries, including four aisles devoted to fresh produce, meat and dairy-deli items. The store is 150,000 square-feet.

Target now has 'P-Fresh' fresh food and grocery markets in 472 of its U.S. discount stores. The retailer plans on adding the markets to 378 additional stores over the next 15 months, giving it a total of 850 units with 'P-Fresh' in-store by the end of next year.

As we've been saying in Fresh & Easy Buzz for some time, Target is on its way to becoming a major player in U.S. food and grocery retailing, largely due to its rapid addition and expansion of the 'P-Fresh' markets inside its existing discount format stores.

The 850 Target discount units set to have 'P-Fresh' by the end of 2011 are only half of the retailer's current total discount store-count. We expect to see the retailer add 'P-Fresh' to additional discount stores in 2012. We will have more on that in a future story.

Target also is headed north. The retailer confirms rumors that it plans to open stores in Canada. It isn't offering a specific date for the opening of the first store. But Target Corp representatives were at a retail industry convention in Toronto last week, shopping for locations. A Target spokesperson says the retailer could ultimately open up to 200 stores in Canada over the next few years.

Related Stories:

September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California

September 24, 2010: Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012

September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011

September 20, 2010: About Today's Walmart Stores, Inc. Smaller Stores Media Frenzy: We Scooped it On July 6, 2010

May 11, 2009: Target on Tap to Put Mini-Grocery and Fresh Foods Markets Into 100 Target Discount Stores This Year; Many More Likely to Come in 2010

November 19, 2009: Competitor News: Target Corp. Planning to Dramatically Expand Food and Grocery Offerings in All of its U.S. Target Discount Format Stores

July 9, 2008: Southern California Market Report: Five Supermarkets; A New Fresh & Easy, Wal-Mart and Super Target Will All Compete in Hesperia Food Retailing Rodeo

July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store

September 23, 2010: Revisting 'marketside by Walmart': Format As We Know it On the Way Out But Some or All Of the Four Stores Could Be Converted

While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California

Target plans to have 'P-fresh' fresh food and grocery markets in 850 of its about 1,500 U.S. discount stores by the end of next year. The 'P-fresh' in-store markets offer fresh produce, meats, deli/prepared foods, perishables, frozen foods and packaged food/grocery items in a 10,000-12,000 square-foot store-within-a-store space. Target has 1,752 Target discount format and SuperTarget stores in the U.S.

Northern California Market Special Report
Breaking Buzz

Over the last 15-18 months, Minneapolis, Minnesota-based discount retailer Target Corp. has opened 42 small-format fresh food and grocery stores in Northern California - at locations ranging from Tracy in the Northern Central Valley and the Sacramento Metropolitan region, to throughout the San Francisco Bay Area - without building one new store. There are currently 72 Target discount stores in Northern California, which is defined as everything north to the Oregon border, and to Merced County in the Northern Central Valley.

Those grocery stores, which offer fresh produce, meats, prepared foods, perishables, frozen foods and packaged groceries, are Target's 10,000-12,000 square-foot 'P-fresh' store-within-a-store markets, which the retailer has so far installed in over half of its 72 Northern California discount format stores, allowing it to create about 450,000 square-feet of brand new food and grocery retailing square-footage in Northern California in a little over one-year's time without building a single new store.

[Related Stories - September 24, 2010: Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012; and May 11, 2009: Target on Tap to Put Mini-Grocery and Fresh Foods Markets Into 100 Target Discount Stores This Year; Many More Likely to Come in 2010]

[Fresh & Easy Buzz has just completed a research project in which we've identified all of the Target discount stores in California, Nevada and Arizona, the three states where United Kingdom-based Tesco has its 168 Fresh & Easy Neighborhood Market small-format (about 10,000 square-feet) fresh food and grocery stores. [See this recent story for a breakdown of the 168 Fresh & Easy stores by region - September 21, 2010:Fresh & Easy Neighborhood Market and Walmart Create A September New Grocery Store Rain Storm in Oceanside, California]

In our project, we first identified the total number of Target discount format stores in each region where Tesco has its Fresh & Easy markets - Southern California, Bakersfield Metro, Fresno Metro (California's Central Valley), southern Nevada and Metropolitan Phoeniz, Arizona. Then identified and verified which ones have 'P-fresh' grocery sections inside, as of today.

Additionally, because Tesco plans to open its first batch of stores in Northern California in early 2011, and has future store sites in northern Nevada, we included those two market regions in our research. Today's story on Northern California is the first of what will be similar reports on Target's 'P-fresh' stores in each of the regions detailed above.]
Target now has 'P-fresh' in-store fresh food and grocery markets (pictured above) in 42 of its 72 discount stores in Northern California, with more on the way.

Below are the 42 Target discount stores with 'P-fresh' fresh food and grocery sections as of today. We list the stores by region, city, and number of stores in the listed city:

Region: Northern Central/San Joaquin Valley

City/#Stores

Tracy = 1 (unit)

(Total in region = 1)

Region: Sacramento Metropolitan/North

City/#Stores

Sacramento = 3
West Sacramento = 1
Davis = 1
Woodland = 1
Elk Grove = 1
Folsom = 1
Rancho Cordova = 1
Roseville = 1
El Dorado Hills = 1
Lincoln = 1

(Total in region = 12)

Region: Nine-County San Francisco Bay Area

City/#Stores

Albany = 1
Antioch = 1
Cupertino = 1
Dublin = 1
Daly City = 1
Fairfield = 1
Fremont = 1
Livermore = 1
Napa = 2
Novato = 1
Richmond = 1
San Bruno = 1
San Mateo = 1
San Ramon = 1
Sunnyvale = 1
Redwood City = 1
Rohnert Park = 1
San Leandro = 1
San Jose = 7
Walnut Creek = 1
Santa Rosa = 1
Vallejo = 1

(Total in region = 29)

Target plans to add the 'P-fresh' fresh food and grocery sections to a number of the remaining 30 Northern California discount stores, which range in size from about 110,000-180,000 square-feet, a company source recently told Fresh & Easy Buzz.

The initiative is part of the discount retailer's plans to have the in-store fresh food and grocery markets in 850 of its U.S. discount stores by the end of 2011, as we reported here on Friday.

Target Corp. has only one of its big, combo food/grocery/general merchandise Super Target stores in Northern California. That store, which is just a couple years old, is in the Merced County city of Atwater, in the Northern Central Valley.

Target and Tesco's Fresh & Easy

In January 2008, Tesco announced it had acquired 37 locations in Northern California - in the San Francisco Bay Area and Sacramento Metro region - for its small-format Fresh & Easy Neighborhood Market fresh food and grocery stores. Since then the retailer has added numerous locations, which we've reported on. See our Northern California Fresh & Easy Store List for details.

Tesco originally planned to launch into Northern California in late 2008/early 2009. However it postponed that launch, and as we recently reported and Tesco's Fresh & Easy later confirmed and announced in a press release on August 19, the grocer now plans to open its first batch of Northern California stores in early 2011. [See - June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open, August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California and August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011' Also: September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California.]

Target announced it's plans to add the 'P-fresh' fresh food and grocery markets inside its discount stores in spring 2009. In contrast to Tesco's Fresh & Easy, it started work right away. Beginning in about May 2009 it began adding the units to discount stores throughout the U.S., including what now are 42 in Northern California. And by the end of next year, Target will have the "P-fresh" markets in many more of its current 72 discount stores in the region.

Tesco's Fresh & Easy would have to open all 37 of its confirmed Northern California locations, along with at least five of the unconfirmed stores, in 2011 just to be even with what Target has achieved as of today.

Interestingly, if you look at our list above of the 42 Northern California discount stores Target currently has its 'P-fresh' grocery sections in, and compare it to our list here of Fresh & Easy Neighborhood Market locations planned to date in the region, you'll see Target already has 'P-fresh' markets in many of the Northern California cities where Tesco plans Fresh & Easy stores.

Additionally, Target has discount stores in most of the Northern California cities where Fresh & Easy stores are planned to date, which it can and likely in many cases will, add the 'P-fresh' fresh food and grocery markets in. Target also is planning two stores in San Francisco, both of which it plans to have 'P-Fresh' markets in. The two stores, one a regular-sized discount format store and the second unit a 60,000-1000,000 square-foot store, will be the first stores for Target in San Francisco.

Further, Target is far from finished building new discount stores in Northern California. And with its new smaller, urban store prototype, it will be able to go into regions and cities like San Francisco, Oakland, San Jose, Sacramento, Marin County and others where it's not often possible to build a 120,000-180,000 square-foot traditional discount store. Most of targets new standard discount format and new urban format stores are set to include "P-fresh' fresh food and grocery markets inside.

Lastly, Target still has 30 of its current 72 discount stores in Northern California without 'P-fresh' markets. Based on information we have, at least half of those 30 stores should have the 10,000-12,000 sqaure-foot store-within-a-store fresh food and grocery markets inside by the end of 2010

Zero-to-42 with minimal investment

Seldom if ever can a retailer go from zero-to-42 fresh food and grocery stores in a little over a year's time without having to acquire a single new parcel of land or one vacant building to put a store in, or spending huge sums of money on for construction and related costs, as Target has been able to do in Northern California.

For Target, project 'P-fresh' is an extremely cost-effective way to get into food and grocery retailing in a significant way in Northern California and throughout the U.S., which it's doing by planning to have the fresh food and grocery markets in 850 of its about 1,500 discount stores in the U.S. by the end of next year. It's also a good way to lure new shoppers into the stores, who then are likely to buy some of the tens of thousands of other items - ranging from household goods, clothes and furniture, to electronics and much more - the retailer offers in its big, discount format stores.

Stories So Far: 2010 'Northern California Market Special Report' Series

September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California

September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011

September 21, 2010: A Look Inside Whole Foods Market's Newest Store, A Mall Location in Santa Rosa, California

September 20, 2010: About Today's Walmart Stores, Inc. Smaller Stores Media Frenzy: We Scooped it On July 6, 2010

September 19, 2010: Whole Foods Market Gives Itself A 30th Birthday Present: 299th Store Opens This Week in Santa Rosa, California

September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011

September 5, 2010: BevMo Chain Ends Full Time Employment For Store Workers; They Say No Way and Join With UFCW Union to Demand 'A Better BevMo'

September 3, 2010: How the California Grocers Association and its Members Can Snatch Victory From the Jaws of the Defeat of California's Plastic Bag Ban

August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California

August 23, 2010: Hybrid 'Good Eats' Market-Cafe From Raley's CEO Michael Teel & Company Opens Today in Sacramento CA

August 22, 2010: The Insider: Challenges & Opportunities: Tesco's Fresh & Easy Neighborhood Market Will Supply its Northern CA Stores From its Riverside County DC in Southern CA

August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California

August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'

August 17, 2010: Henry's Farmers Market 'Beats' Fresh & Easy Neighborhood Market to Northern California Despite Multi-Year Head Start; Elk Grove Store Opens Tomorrow

July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California

July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening

July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain

July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle

July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle

July 14, 2010: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay

July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store

June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona

June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open

June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA

June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm

May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA

May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start

May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

[Also: click here , here and here for a selection of past stories on Fresh & Easy and Northern Calfornia.]

Target to Have 'P-fresh' Fresh Food & Grocery Markets in 850 Stores By 2011 End; First Smaller Urban Store Set For Seattle in 2012

Target, the second-largest U.S. discount chain (after Walmart Stores, Inc.) hit a bulls-eye today with its "On Target," "All Target," media event, which it held at a location dear to the company's, and Minnesota Twins fans' hearts, in Minneapolis, Minnesota. Target is headquartered in the city.

The location: First up, the event was held at Target Field, the Minneapolis ballpark named after the retail chain and home to the Minnesota Twins baseball team. That's a pretty good start when it comes to branding an event. [Target Field has a high definition Web Cam, which allows you to view the ballpark. You can check it out here.]

Little details: Next, drinks and snacks at the event were from a nearby Target store or two. That's pretty good branding reinforcement.

See, "All Target," and "On Target" so far.

The bulls-eye: But most importantly, the retailer was on target - and even hit a bulls-eye because there was actual news announced (some was confirmation), along with a lot of good information offered, at the event. You can't say that about many, or even most, corporate media events.

Target's senior executive team was present today, nearly to a man and women. Presentations were given by CEO and chairman Gregg Steinhafel, CFO Doug Scovanner, John Griffith, executive vice president of property management, and a host of corporate merchandising executives, who talked in detail about merchandising and marketing plans, upcoming holiday promotions, a new advertising campaign, and more.

We're going to focus (below) on the two major announcements, and one minor, made today that most pertain to the food and grocery retailing aspects of Target's business and U.S. food and grocery retailing in general.

Target's Smaller-Format Urban Stores

Target confirmed and publicly announced today it's created a new urban prototype store format. The format ranges in size from 60,000-100,000 square-feet, with an average size of about 80,000 square-feet, according to John Griffith, Target's executive vice president of property management.

The average size of Target's discount format stores, which is the most prevalent of the chain's two current U.S. formats (the other being its combination grocery and general merchandise Super Target), ranges from 120,000-180,000 square-feet, according to Griffith. Target has about 1,500 discount stores in the U.S. and about 243 Super Target units, which are similar to a Walmart supercenter and offer a full selection of food and grocery products, along with everything Target sells in its discount stores.

Griffith said the first urban format Target store, which will be about 90,000 square-feet, will open in 2012, in Seattle, Washington. Initial plans, subject to change, are to have the smaller, urban stores in 10 U.S. cities to start. The cities include San Francisco, Los Angeles, New York, Chicago, Boston, Miami, and Baltimore. The urban format puts a premium on offering more essential types of products.

Target says it currently has about 150 full-sized discount stores located in numerous U.S. cities, including in a few big cities like Chicago and New York City, that have populations of over 100,000. Most of its stores are in suburban areas though.

That's where the smaller, urban store format comes in. The smaller stores will be used when size is limited, which is the case, for example, in most all of Manhattan, as well as in other dense urban cities like San Francisco and Seattle, and in urban places like downtown Los Angeles and many parts of Chicago, along with many other places in the U.S.

Like Walmart, which has now decided to "go smaller and go urban," in addition to being big, brawny and mostly suburban - See: July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store - Target has come around to realizing it's been missing a huge opportunity, and the added sales that come with it, by not having stores in most of America's most populated urban regions and cities. That's due largely to Target's (and Walmart's) strategy to date - instead of having multiple store sizes and formats, designed to fit various regions, it's relied on a one-store-size-fits-all approach, which has resulted in being locked out, for the most part, of these highly populated but space-limited cities. Target's Griffith said today the retailer now plans to make the store fit the site rather than making the site fit the store.

Target, like Walmart, is now hungry for those urban shoppers' dollars.

In July of this year, Target submitted a proposal to the city for its first store in San Francisco. That store, which would be a full-sized Target discount store, is planned to go into two vacant big box buildings, a former Mervyn's department (before that a Sears) store and a former Good Guys electronics store in a shopping center at Masonic Avenue and Geary Boulevard in the city's Richmond District, near the Laurel Heights neighborhood. The center is also near the University of San Francisco's main campus. Target would renovate the stores, which are next to each other, completely, creating one big store.

Target is already making plans for a second store in San Francisco. That store, which would be one of the new, smaller format stores, would be in the popular Metreon Shopping Center, in the city's South of Market neighborhood. The Metreon is a 350,000-plus square-foot, four-level combination shopping, technology and entertainment center. See here.

The smaller-format urban stores will include Target's 'P-fresh' fresh food and grocery sections, which it's been aggressively putting in its discount stores, although the mini-markets could be scaled down on a store-by-store basis from the current 10,000-12,000 square-feet size, based on the smaller stores' overall square-footage.
'P-fresh' Food & Grocery Markets in 850 Stores By 2011 End

The second bit of news Target announced today is that it will have 'P-fresh' fresh food and grocery store-within-a-store markets (pictured above) in 850 of its Target discount stores by the end of 2011. The 'P-fresh' sections average 10,000-12,000 square-feet. Troy Risch, Target's executive vice president for stores, said 'P-fresh' will be in 450 discount stores by the end of this month, which means the retailer plans to add the fresh food and grocery sections to 400 stores between October 2010 and the end of 2011.

To put that number into perspective, Target started out in mid-2009 saying it planned to test the 'P-fresh' grocery sections in about 100 stores. At the end of 2009, saying it was pleased with the initial test, the retailer said it would add the mini-fresh food and grocery markets to 350 discount stores this year. The 850 number means by the end of next year, Target will be offering shoppers the fresh food and grocery option in over half of its current 1,500 discount stores.

Target has been aggressively installing the 'P-fresh' food markets in its discount stores since first announcing its plans to do so in mid-2009. In fact, Fresh & Easy Buzz is currently working on a research project in which we are identifying all of the 'P-fresh' sections added to Target stores in California, Nevada and Arizona - the three states where Tesco has its 168 small-format (about 10,000 square-feet) Fresh & Easy Neighborhood Market fresh food and grocery stores. Thus far into our research, the numbers are dramatic.

For example, see how many 'P-fresh' markets Target has added to its discount stores in San Jose, California over the last 12-15 months. It's mentioned in this story - September 22, 2010: California Dreamin': Fresh & Easy Neighborhood Market, Whole Foods Market Combined Open a Total of Four Stores Today in California - we published on Wednesday.

What's powerful about the 'P-fresh' units for Target, compared to say what Tesco is doing with Fresh & Easy - both are small-format and have numerous similarities of format - is that Target will have 850 units, and can ultimately have 1,500 - and more as it opens new discount format stores - 'P-fresh' in-store markets by the end of next year, without having had to construct one new store building or acquire one vacant building to house the fresh food and grocery markets in.

Take California, for example. Target has 245 discount stores in the Golden State at present, plus a handful of its Super Target combination supermarket/general merchandise stores.

Tesco has 107 of its 168 Fresh & Easy stores in California.

This means Target, if it chooses to put 'P-fresh' fresh food and grocery sections in all of its California stores by the end of 2011, would have double the number of stores as Tesco's Fresh & Easy has, assuming Tesco opens 20 stores in California next year, without having had to build a single new store.

This is powerful and cost effective in food and grocery retailing. The capital costs for Target are minimal by being able to put the 'P-fresh' units into existing stores. Plus the grocery sections draw shoppers who buy the other goods sold in the stores. Even if Tesco were to open 50 Fresh & Easy stores in California in 2011, from store-count and cost-effective perspectives, Target has a huge advantage.

More Grocery, Health & Beauty and Body Care SKUs

Target also said today it's been added more health and beauty and body care items, including private brand, in its stores, something which has been evident in the stores for a few months.

Target has also been increasing its packaged food and grocery, and perishable, SKU count over the last nine months in discount stores without 'P-fresh' sections.

We will be offering an analysis piece on Target's expanded food and grocery retailing efforts - its expansion of "P-fresh," along with how it fits with the retailer's new smaller store urban plans. Stay tuned.

Related Stories:

May 11, 2009: Target on Tap to Put Mini-Grocery and Fresh Foods Markets Into 100 Target Discount Stores This Year; Many More Likely to Come in 2010

November 19, 2009: Competitor News: Target Corp. Planning to Dramatically Expand Food and Grocery Offerings in All of its U.S. Target Discount Format Stores

July 9, 2008: Southern California Market Report: Five Supermarkets; A New Fresh & Easy, Wal-Mart and Super Target Will All Compete in Hesperia Food Retailing Rodeo

July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store

September 23, 2010: Revisting 'marketside by Walmart': Format As We Know it On the Way Out But Some or All Of the Four Stores Could Be Converted

Toy Store Chain Toys "R" Us Joins the Store-Within-A-Store Mini Grocery Trend; Now Has New "R" Market 'Grocery Stores' in Over 260 Toys "R" Us Stores

Retail Trends Report: Alternative-Format Retailers, Food & Grocery Sales, Store-Within-A-Store Limited Assortment Mini-Markets

In this April 15, 2009 piece [Family Dollar Discount Store Chain Increasing Amount of Store Square Footage Devoted to Merchandising Food-Grocery Items in Stores Beginning in May] about the Family Dollar dollar store chain and other alternate format retailers involved in selling food and grocery items, we mentioned an April 3, 2009 story in the food industry publication Natural~Specialty Foods Memo about toy store chain Toys "R" Us testing store-within-a-store mini-grocery sections named "R" Market in a handful of its Chicago, Illinois-area toy superstores. (See the photograph of the in-store "R" Market at top.)

[This is the original story from Natural~Specialty Foods Memo: [April 3, 2009: Retail Memo - Alternate Formats: Toys 'R' Us Testing Store-Within-Store 'R Market' Grocery Departments in Three Chicago-Area Toys 'R' Us Toy Stores.]

On April 28, 2009, Toys "R" Us confirmed that April 3 report published in Natural~Specialty Foods Memo, saying in a statement that it has opened what it calls "R" Market grocery sections in over 260 of its 585 Toys "R" us banner toy superstores in the U.S. A few of the "R" Market grocery sections are located in Toys "R" Us toy stores in California and Arizona, where Tesco has all but about 30 of its 120 Fresh & Easy grocery and fresh foods markets. The other regional market for Fresh & Easy is southern Nevada.

Toys "R" Us, Inc. operates more than 1,500 stores, including 847 Toys "R" Us (565 units) and Babies "R" Us (282 units) stores in the U.S., along with more than 700 international stores in 32 countries, which includes licensed and franchise stores. It also sells toys and related products via its Web site.

The "R" Market store-within-a-store grocery sections contain a mix of about 1,300 SKUs in the consumables and related non-foods packaged goods categories, according to Toys "R" Us.

Among the product categories (and merchandising themes) included in the "R" Market grocery store-within-the-Toys 'R" Us-toy-superstores are, according to and as described by the retailer:

>Light Snacks, Breakfast Foods and Drinks: Parents looking to fill lunchboxes or refuel while on-the-go will delight in the "R" Market assortment of snacks, including chips, puffs and pretzels, cookies and crackers, fruit snacks, cereals and nutrition bars from favorite brand names, as well as a variety of healthy munchies such as squeezable fruit and apple sauce."R" Market also features a variety of juice boxes, kid-sized nonperishable milks and other soda alternatives perfect for snack time. In addition, mom and dad can stock up and save on bulk packages of bottled water in regular and fun-sizes for kids.

>Paper Goods: From hosting birthday parties to wiping up minor spills, customers will find a broad assortment of disposable paper goods available in "R" Market, including napkins, paper towels and toilet paper. Paper towels and toilet paper are also offered in bulk packages at value prices.

>Cleaning Supplies and Laundry Detergent: Whether tidying up the house or mopping up after a messy play date, shoppers can find the supplies they need to make their homes sparkle in "R" Market. A selection of laundry detergents and fabric softeners from popular brands is also available, along with kid-friendly versions of stain removing wipes.

>Expanded Assortment of Essentials for Little Ones: Parents can now find an even larger assortment of basics for baby at Toys"R" Us. The "R" Market collection features a variety of diapers, wipes and changing products from favorite brands, including Pampers, Huggies, Seventh Generation and Earth's Best in one convenient location upon entry. Baby food and infant formula from Gerber, Earth's Best Organic, Similac, Enfamil and Nestle Good Start are also showcased in this unique assortment, which includes nutritional items for infants, as well as tasty snacks for toddlers and preschool-aged children.

>Health and Beauty Aids: From humidifiers to hand soap, this expanded collection of health and bath essentials includes first aid and wellness products to keep kids looking and feeling good.

>Sweet Treats: In the dedicated candy section within "R" Market, customers can browse through a world of chocolate, lollipops, cotton candy, mints, and sour and hard candies. Additional treats include animal crackers, popcorn tins, giant candy bars and a wall of theater candy boxes. Toys "R" Us has also added novelty items, including marshmallow blasters, gumball machines and PEZ dispensers to make indulging in candy even more fun. Unique candy playthings, including spinning lollipops, candy necklaces and other character-themed candies can also be found in this aisle.

>Together Time in the Kitchen: For families hoping for homemade treats, "R" Market also offers an assortment of pizza kits and baking mixes to make cooking a cinch. Kid-Focused Consumables: Making lunchtime more enjoyable is simple with the "R" Market assortment of unique fizz beverages and fruit juices featuring favorite characters, and plentiful mixes of Sesame Street organic munchies from the makers of Earth's Best Organic.

>Making Bath Time Fun: With cool products such as motorized toothbrushes, bathtub crayons and paint from brands like Crayola, playtime doesn't have to stop when kids jump in the tub.

{You can read the April 28, 2009 statement from Toys "R" Us about the new "R" Market grocery sections here.]

The "R" Market product mix contains only shelf-stable items. Their are no perishables.

The "R" Market store-within-a-store grocery sections are clearly set-off as a separate area within the Toys "R" Us toy stores, as you can see in the photograph at the top of this story. They have the look of a mini-grocery store inside the toy store, being set-off with colorful graphics designed to create an individual identity for the "R" market grocery section.

The "R" Market Strategy

The retailer's strategy behind the in-store grocery sections is to increase same store sales by offering the 1,300 consumable and related "essential" grocery and non-foods items in "R' Market, along with hoping to encourage shoppers to make more frequent trips to the Toys "R" Us stores now that they offer the grocery and related item selection.

The strategy is particularly motivated by the current economic recession. However it's a strategy that has utility even in good economic times as it offers the retailer the opportunity to gain incremental sales from customers as they pick up the grocery and non-foods packaged goods items while shopping in the store for destination-oriented items like toys and board games.

The grocery items might serve as impulse items for both kids and adults shopping the toy stores. That's what Toys "R" Us is hoping at least, as they are marketing the "R" Market in-store concept as being designed to create greater convenience for customers.

Alternate-formats and food & groceries: A growing trend

In this story from yesterday [May 11, 2009: Target on Tap to Put Mini-Grocery and Fresh Foods Markets Into 100 Target Discount Stores This Year; Many More Likely to Come in 2010] Fresh & Easy Buzz reported on and wrote about Target Corp.'s plans to put its new store-within-a-store mini-grocery and fresh foods markets in 100 of its Target discount format stores by the end of this year, with many more likely to come in 2010.

Like Target, Toys "R" Us is looking for a way to adapt its stores to the current consumer reality, which is finding an increasing number of shoppers focusing primarily on purchasing essential food, grocery and non-foods packaged goods items, while decreasing purchases of non-essential goods. This recession-induced "new frugality" of course comes at the expense of consumer purchases on items like toys, furniture, clothing and the like -- the type of items retailer's like Toys "R" Us and Target have historically focused on.

And like Target's in-store grocery and fresh foods mini-market development, the fact that Toys "R" Us has added the 1,300 SKU "R" Market grocery sections to over 260 of its U.S. stores thus far -- and it plans to add the sections to additional toy stores -- means another significant increase to the overall number of square-footage devoted to the retailing of food, grocery and non-foods packaged goods items in the U.S.

'Share of stomach' and 'share of pantry'

More such food and grocery square-footage -- particularly from alternate-format retailers like dollar stores, discount stores and even now toy stores -- added in the U.S. means greater competition for retailers that put a primary focus on retailing food, grocery and non-foods packaged goods items, such as supermarkets, mass merchandisers and other format grocers.

There's only so much "share of stomach" and "share of pantry" after all.

For example, if on a typical Saturday shopping outing, Mrs. consumer picks up laundry detergent, Pampers, hair shampoo and candy at Toys "R" Us while shopping for a board game for her kids, then while in a nearby Dollar General store she picks up $25 worth of canned and packaged food items, followed by a trip to a Target discount store, where along with buying a new pair of shoes for junior, she grabs a bunch of fresh produce, milk, eggs and butter in the in-store grocery and fresh foods mini-market, these are all items she won't purchase at the supermarket, which just happens to be her last stop on this typical Saturday shopping outing.

There's a growing trend among alternate-format retailers -- drug chains like Walgreens, CVS and Rite-Aid; home stores like Home Depot and Lowe's; office stores like Staples and Office Depot; 99-Cent and Dollar format stores; and general merchandise discount stores like Wal-Mart, Target and KMart, among others; and now even Toys "R" Us -- to offer limited assortments of consumables and non-foods packaged goods items for sale in their respective stores and formats.

These alternate-format retailers tend to pick-off item sales from supermarkets and other format retailers that focus on selling food and groceries, making it more difficult for grocers to maintain and increase the average market basket purchase size shoppers make in their stores, for the reason described in the "typical shopping outing" example we offered above. Average market basket refers to the total dollar amount a customer spends during his or her shopping trip to a store.

If a consumer can buy milk, eggs and other essentials at a drug store or discount store, get cleaning supplies at Home Depot or Toys "R" Us and the like, the convenience of such opportunity adds to the overall competition for supermarkets.

Not only are grocers increasingly competing with each other -- which is a rather competitive activity in and of itself -- but they also are competing against a myriad of alternate-format retailers offering various limited assortments of food, grocery and non-foods items in their stores. And that level of competition is increasing for grocers as more and more alternate-format retailers add food and grocery items to their stores and promote the items aggressively.

Attack of the alternative-formats': A growing trend

It's our analysis that this trend of alternate-format retailers adding limited food and grocery item assortments -- along with existing retailers like Dollar format stores and others increasing the assortments of consumables and non-foods items they merchandise -- will continue to grow in the U.S.

For example, as we've reported, the Walgreens' drug chain has embarked on a program in which it's significantly increasing the number of consumable and essential non-foods packaged goods items it offers in its drug stores throughout the U.S., including in California, Nevada and Arizona, the three Western U.S. states where Tesco's Fresh & Easy operates its current 120 small-format combination grocery and fresh foods markets.

Walgreens has increased its promotional advertising of consumable and non-foods packaged goods as well. The first two or three pages of its multi-page weekly advertising circular looks these days more like a supermarket promotional piece than it does a traditional drug chain ad circular, for example.

A number of dollar store format chains are also adding a significant number of new food and grocery SKUs to their overall item merchandising mix as well, including Dollar General, Dollar Tree and the 99-Cents Only chain,which is based in Southern California. The 99-Cents Only chain even offers perishables, including fresh produce and meats, in a number of its stores.

Long gone are the days when U.S. grocers only had to worry about competing against other grocers.

Instead, competitive strategy today must include keeping an eye out for alternate format retailers that want a share of shoppers' dollars in the food, grocery and non-foods packaged goods categories, and often use food and grocery items as promotional loss leaders designed to get customers in the door in the hope they will then purchase other items sold in the stores.

Doing so is part of the brave new world of food and grocery retailing in the U.S. We even have a suggested title for the movie version: "The attack of the Alternative-formats'."

Related Stories From Fresh & Easy Buzz:

>May 11, 2009: Target on Tap to Put Mini-Grocery and Fresh Foods Markets Into 100 Target Discount Stores This Year; Many More Likely to Come in 2010

>April 15, 2009: Family Dollar Discount Store Chain Increasing Amount of Store Square Footage Devoted to Merchandising Food-Grocery Items in Stores Beginning in May

>March 2, 2009: Walgreens Promotes Former Tesco Fresh & Easy Exec Bryan Pough to VP Merchandising Position; Move Fits Drug Chain's Current Strategic Focus

>January 22, 2009: Neighbors by Location Only: Will Mega-Drug Chain Walgreens' New Focus on Consumables and 'Affordable Essentials' Rob Sales From Tesco's Fresh & Easy?

>December 22, 2008: Breaking News: Mega-Drug Chain Walgreens Hires Former Tesco Fresh & Easy USA VP of Operations Brian Pugh For New VP of Format Development Position

>April 18, 2009: Competitor News: Wal-Mart Close to Clearing First Major Hurdle For its 1.1 Million Square-Foot Regional Distribution Center in Merced, California

>September 15, 2008: Wal-Mart Expanding its Discount Store-to-Supercenter Conversion Program As Part of its Strategy to Grab Even More Food and Grocery Sales Market Share

>December 29, 2008: Competitor News: Winco Foods to Expand in California and Nevada in 2009; Put Aggressive Focus on Central Valley, Northern California and Northern Nevada

>December 16, 2008: Food & Grocery Retailing in the Recession: Bashas Broadening the Shopper-Base in its Hispanic Format Food City Stores; Shoppers Search for Value

>January 21, 2009: Breaking News: New-Wave, Hybrid Food-Grocery-Convenience Store 'Locali Conscious Convenience' to Open Tomorrow in Hollywood, California

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[Photo Credit: Toys "R" Us, Inc.]