Target Goes Bananas For Walmart Shoppers

By ANNE D'INNOCENZIO and EMILY FREDRIX
|  Thursday, May 28, 2009  |  Updated 9:23 AM CDT
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Great Foods You Aren't Eating

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Would you rather buy your groceries at Target or Wal-Mart? Supermarkets are no longer an option.

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Target wants to be more like Walmart. Walmart wants to be more like Target. Both are bananas for your business.

Target, the discounter, known for stylish towels and jeans, has long sold groceries. But it is barely holding onto its customers while its chief rival, Walmart, is rapidly picking up new shoppers as its powerful low-cost message resonates in the recession. So Minneapolis-based Target plans to stock more fresh food — including bananas — and play up its low prices.

Meanwhile, Walmart, the world’s largest retailer, is expanding its selection of nonessentials like home furnishings, while improving the quality of its store-brand food like thin-crust pizza and ice cream.

Target wants to keep its innovative edge, for growth, but it is clearly turning to groceries, including the introduction late last year in some of its general merchandise stores — as opposed to its super centers — of prepackaged perishables like bananas and bagged lettuce. It plans to expand the concept to 100 new or remodeled stores by year’s end and to most of its new or remodeled stores in the next three years.

Target also is testing a “low-price” promise in advertising for certain locations, which will match competitors’ local advertised prices on identical items. It’s also relaunching its store-label Target Brand as Up & Up, to span 40 categories like health and beauty items by summer when new marketing begins.

But Walmart keeps rolling out new programs too. Walmart relaunched its Great Value food brand in March with an improved selection and reformulated recipes, and it is revamping its electronics aisles and adding exclusive home furnishing brands.

While Walmart has made big strides, Target’s apparel is far more stylish, analysts say, and it retains another advantage: a better shopping experience, experts say.

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