How Target’s building a three-tier private label strategy in food

Date : 09 March 2021

Stewart Samuel

Program Director - Canada

The launch of Target's latest range, Favorite Day, complements its existing food private labels, Market Pantry and Good & Gather. We look at how the new range fits into the portfolio.

700 items to start appearing in-store in April

Favorite Day is positioned as a range of indulgent sweet and savoury treats. There will be two key streams of products, Favorite Day Bakery and Favorite Day Gourmet. Categories include bakery, snacks, candy, premium ice cream, cake decorating supplies, beverage mixers and mocktails. The roll-out will start in April, with plans to grow the range to over 700 items. All products will be priced under $15.

Source: Target

Good, better, best

This range builds on the launch of Good & Gather in 2019. It has grown to be almost 2,000 products and is expected to be one of the retailer’s largest private labels over time. Its launch provided Target with the opportunity to phase out its Archer Farms and Simply Balanced brands, while scaling back Market Pantry. The introduction of Favorite Day further simplifies the retailer’s food offer, supporting the good, better, best ranging strategy that has become the model for many food private label offers. The range also highlighs how good private label development has become in the US over the last five years, with many retailers improving their offers as a key way to compete against the growth of Aldi and Lidl.

Core capabilities enhancing business profitability

With over 45 private brands, Target is a powerhouse in this area. Over 30 of these have been developed over the last four years. It has built significant capabilities in areas such as marketing, merchandising, product design and development and sourcing, enabling it to grow four of them into $2bn brands, while 10 deliver sales of more than $1bn annually. This has enabled it to build a differentiated proposition and generate a high level of customer affinity, especially as it continues to refine and update its ranges in line with the latest trends. More importantly, these ranges make an outsized contribution to Target’s profitability, representing more than a third of all sales and a larger component of gross margin.

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