Retailers remodel rather than opening new stores - The Packer

Retailers remodel rather than opening new stores

05/25/2010 01:49:00 PM
Ashley Bentley

The grocery retail scene in the Twin Cities is still dominated by national chains, although the dynamic within those chains has shifted significantly in recent years.

“Target’s a homegrown company, and they’re taking produce to a whole new level,” said Kevin Hannigan, vice president of J&J Distributing Inc., St. Paul, Minn. “We’re seeing prices come to this level we haven’t seen in a long time.”

The Minneapolis-based company continues to expand its PFresh store footprint, adding fresh produce and prepared foods to Target general merchandise stores.

The company started the new store layout with two store upgrades in the Twin Cities in 2008, and has since been taking the concept national.

“There is a pretty significant initiative to bring an expanded assortment of food, particularly fresh food,” said Joshua Thomas, Target communications. “We’re not adding on, we’re just adjusting how we allocate space.”

By the end of 2009, the company had upgraded more than 100 Target stores in the U.S. to the PFresh store layout. The layout fits in the same footprint as a Target general merchandise store, but adds an open market, tables, open refrigerator cases and casket freezers, Thomas said.

All of the produce sold in PFresh stores is UPC-coded, as the stores’ registers are not equipped with scales.

Thomas said Target continually evaluates its offerings at PFresh stores and makes changes as needed.

For example, the company realized its 3-pound bag of bananas was too large for many consumers, so it added on a 19-cent-each banana option to many stores.

By the end of 2010, there should be 17 PFresh locations in the Twin Cities, as Target continues to expand the store layout. The company is investing around $1 billion in capital to remodel these stores nationwide.

The company also is looking at expanding its deli and prepared food departments in the PFresh stores in 2010, Thomas said.

Other retailers in Minneapolis, St. Paul

Wal-Mart, Trader Joe’s and Aldi are also dominant chains in the Twin Cities market.

“Aldi’s is expanding fast. Target is putting fresh fruit in all its stores, it seems. Wal-Mart Supercenters are expanding,” Hannigan said. “The national players are really making waves.”

Inroads by these retail chains cause displacement in other retail business, Hannigan said.

“I think there’s some retailers up here that have a lost a lot of business in the last year and a half,” Hannigan said.

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