Last week Minnesota Public Radio featured this interesting look at Minneapolis based Targets Private Brands. In an interview in the article Annette Miller, who oversees Target’s grocery business says 20 percent of Target’s sales volume comes from their Private Branded products.
Target benefits from popularity of store brands
Minneapolis — Target is one of the retailers most aggressively pushing its own brands, as more consumers try to stretch their dollars buying lower-cost store brands. Store brands are products that bear the name of the retailer, not the manufacturer.
They now account for about 17.4 percent of grocery, cosmetic and other general merchandise purchases — from potato chips and milk to toilet paper and aspirin. That compares to 16.3 percent of sales two years ago.
According to Nielsen, a consumer research firm, store brand sales total about $90 billion a year.
At the Target store in downtown Minneapolis, it’s not hard to find shopping carts or baskets filled with Target-brand groceries.
“I will buy the Target brand and not have any qualms about the product,” said Emma Shankland, a penny-pinching University of Minnesota junior, who usually buys Target brands. “It is a bit cheaper, and it’s still really good quality.”
Target said it aims to have its store-brand products at least match name brands in quality, and beat them on price. Target’s Archer Farms products are priced 10 percent to 30 percent lower than name brands.
Those products sell well, according to Annette Miller, who oversees Target’s grocery business. She says 20 percent of Target’s sales volume comes from their own branded products.
Miller said both the number and sales of Target’s store-brand food products are on the rise.
“We’ve grown our own brand foods faster than our total food growth over the past five years, as we’ve continued to expand our product offerings into new product categories that we hadn’t developed before,” Miller said.
Target comes up with its store-brand foods in test kitchens at its Minneapolis corporate headquarters. Target employees prepare, cook and taste test what goes on Target’s grocery shelves.
Target focuses on products consumers are more inclined to try, such as snacks, coffee, dairy and staples like sugar. With certain foods, Miller said Target tries to come up with flavors consumers won’t find anywhere else.