The retailer's holiday fashions didn't sell well, but its grocery business has become a big deal.
Turns out, food is quite fashionable at Target Corp.
So much, that the Minneapolis retailer -- best known for its cheap-chic attire and goods -- has launched a new ad campaign that uses runway models to tout its growing grocery line.
Target, with ad agency Mono in Minneapolis, created eight tongue-in-cheek TV spots that treat groceries like fashion accessories in a photo shoot. In one spot, a model decked out in a white dress and heels struts through the food aisle while muffin and cake boxes explode in different colors. She then crushes an egg with her hand.
And these days, items like eggs and muffins have become a critical part of Target's business. The retailer has been expanding its grocery selection, particularly with investments in its "P-Fresh" fresh-food section. Out of its 1,782 stores, about 1,100 have a vast fresh-food layout and more than 250 have a full grocery store.
"They've reached that tipping point where their grocery business is now ready for national advertising," said Stan Pohmer, a Twin Cities retail consultant.
In addition to TV spots and newspaper inserts, the campaign will include three radio ads and digital short films that will run as banner ads online.
Target's chief marketing officer, Jeff Jones, said that using fashion models to sell groceries, "combines the design ethos and fashion credibility that Target has with the idea that it also has great grocery items at a great price."
This also comes at a time when general merchandise sales have been tepid for Target. Last week, the retailer disclosed that December sales at stores open for at least a year were flat with the same month a year ago. Target's December furniture and electronics sales were weak, and analysts have called its holiday partnership with Neiman Marcus a failure as shoppers shunned the line's pricey sweaters, tops and dresses.
Those kind of disappointments have made groceries a bigger percentage of Target's sales, analysts say. And with nearly every Target store in the country renovated to sell food, the company is turning its focus to groceries -- originally viewed as a ploy to bring shoppers into Target more often.
"In Minneapolis, people understand that Target sells groceries. But Target hasn't quite gotten the message across to the rest of the country yet," said David Livingston, a Milwaukee-based grocery analyst.
The message of the new ad campaign is that, if customers use their Red Cards to buy groceries, the discount makes Target a cheaper place to buy food than Wal-Mart, he said.
It's a formula that already has worked for Target, which has stolen business from nearby grocers. As a result, items typically purchased in grocery stores, such as food, pharmacy items and health and beauty products, now account for 28 to 33 percent of Target's revenue, Livingston said.
"Even if Target's grocery sales don't increase one penny, their percentage of total sales will go up because sales in other parts of Target are down," Livingston said.
Strategically, emphasizing food sales is a good move, Pohmer said.
"Food may be a little bit lower profit margin product than Target's general merchandise, but it's purchased more frequently," Pohmer said. "And when people come into a discount store to buy groceries, they ... usually buy something on the general merchandise side of the store that carries a higher profit margin."
The Associated Press contributed to this report. Steve Alexander • 612-673-4553