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Down to Business: Target to add grocery aisles in Capital Region stores

Down to Business: Target to add grocery aisles in Capital Region stores

Get ready for a new grocery option in the Capital Region: Target.

Get ready for a new grocery option in the Capital Region: Target.

Yes, the upscale discounter, dubbed “Tar-zhay” by fans, is adding a wider assortment — including fresh fruits and vegetables — to its food aisles.

No, these won’t be SuperTarget stores, the also-ran to the Wal-Mart Supercenter, in which a full-sized supermarket and discount department store are combined under one roof. SuperTargets number just 250 nationwide, dwarfed by Wal-Mart’s 2,750 Supercenters.

What we’ll start to see here beginning next month are renovations to two of the region’s half-dozen Target stores that will incorporate the company’s expanded grocery section, a new prototype called “PFresh.” The additional space for food sales was included in 340 store remodels this year and will be part of 380 projects planned next year. First up for renovation locally are the stores at Northway Mall in Colonie and off Route 50 in Wilton.

PFresh also is the format used for new stores that aren’t designated as SuperTarget locations, says Tammy Robertson, a member of the Target communications team at the company’s headquarters in Minneapolis. That could mean a PFresh store will be built at the former Kmart Plaza on Saratoga Road in Glenville, where Target was identified as the anchor tenant in redevelopment plans submitted to the town earlier this month. Robertson declined to discuss any interest Target may have in Glenville.

The company has described PFresh as an “open-market grocery layout, stocked with a selection of fresh produce, fresh meat and baked goods” that includes about 90 percent of the product categories found in a typical supermarket. Designed as “fill-in shopping” to aid busy consumers, it nevertheless is meant to add to Target’s bottom line at a time when penny-pinching is de rigueur. Company officials said in a third-quarter conference call with analysts last month that stores remodeled to the PFresh format saw a 6 percent bump in sales immediately afterward — not only from groceries but from added buying across the store.

Like other retailers, Target was hammered by the recession as consumers cut back on discretionary purchases in electronics, home furnishings and apparel — even at the company known for “cheap chic.” Meantime, Wal-Mart did better with its focus on such essentials as groceries, which accounted for 51 percent of overall sales last year.

Target began experimenting with the mini-supermarket idea two years ago, and started to roll out the PFresh remodel in earnest last year. Renovated stores now devote some 8,000 square feet to foodstuffs, which include more national brands and Target’s private labels. One Citigroup analyst has estimated that customers who purchase food at Target spend 8 percent more and visit stores four more times each year.

Robertson, the Target spokeswoman, says some 850 of the company’s 1,750 stores will be remodeled by the end of next year. (In addition to the expanded grocery section, the home, electronics, beauty, video games and shoe departments also are renovated.) Remodeling time varies by store, but typically takes three months and costs $2 million to $4 million per location. A timetable for other Capital Region renovations won’t be available until early next year, Robertson says.

Gregg Steinhafel, Target’s chairman, president and chief executive, refers to PFresh as one of two “game-changing strategies” for the company (the other is a new rewards program for the Target credit card) that will drive growth “for years to come.” And beyond their bottom-line merits, “I’m excited because these initiatives are great for our guests, delivering both convenience and value,” he told analysts in the third-quarter earnings call.

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