Target's Sales Numbers Reveal How Fans Feel About Store-Brand Groceries
According to Target's latest sales numbers, customers can't get enough of the big box chain's food and beverage offerings. As Food Business News reported, Target's grocery category is growing significantly, despite the brand's slowing sales overall — highlighting the importance of Target's food and beverage products to consumers.
Per the Food Business News report, Target closed its first quarter on April 30 with a net income of $1.01 billion. This number marks a 52% decrease from the $2.1 billion seen this time last year. At the end of 2022's first quarter, each common stock share was worth $2.17 — compared to $4.20 in 2021.
Target executives acknowledged that these numbers fell below their goals for the first quarter, reported the publication. However, despite these setbacks, long- and short-term metrics show that Target's food and beverage sales have managed to expand. Specifically, this growth has been seen in Target's own in-house product lines — meaning that customers have become particularly fond of the company's grocery options.
The news comes at a time when grocery prices continue to skyrocket due to inflation, supply chain disruptions, and other issues. As Tasting Table reported in March, rising food costs have prompted shoppers to increasingly choose budget-friendly versions of their usual staples.
How Target's food and beverage sales have changed
According to Target's executive vice president and chief growth officer A. Christina Hennington, per Food Business News, the brand has seen significant growth in food and beverage sales over the past few years — especially when it comes to their in-house lines, like Good & Gather.
"Over the last three years, first-quarter food and beverage sales have increased by nearly $1.8 billion, accounting for nearly one-fourth of our total sales growth over that time," said Hennington. "Market share gains in this category are being driven by unit share growth, most notably in our owned brand offerings, as more of our guests turn to Good & Gather and Favorite Day for their meal solutions."
Target's chief financial officer Michael J. Fiddelke echoed that point, adding that these in-house brands offer benefits to both the company and shoppers. "We've talked a lot, and I think it's important as we think about [consumers] looking for value, the strength of the owned brands in food and beverage .... [That's] great from a guest preference perspective. It's also good for margin."