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Target (TGT) Launches Good & Gather Brand, Ups Grocery Game

Zacks Equity Research

In response to growing competition in the grocery space, Target Corporation TGT launched a new food brand, Good & Gather. The products of the brand will be rolled out in phases. Being its most ambitious project, the brand is touted to become Target’s largest owned Food & Beverage brand. About 650 products of this brand will be available from Sep 15 in stores and on Target.com. In addition to this, consumers will also be eligible for same-day delivery.

Prior to this, the company's owned brand launches included Everspring, Auden, Colsie and Cloud Island Essentials. Including Good & Gather, customers will now be able to shop more than 25 new owned and exclusive brands by the end of 2019. This move comes at a time when private brands at grocery stores are gaining traction. Per sources, sales of private food brands across the United States in 2018 increased 5.5% year over year.

With this flagship brand’s rollout, Target customers will get access to a wide range of food and beverage products, with quality ingredients, good taste, are convenient to prepare and available at an affordable price. These products are also free of artificial flavors and sweeteners, synthetic colors, and high fructose corn syrup. Also, the company offers a money-back guarantee on these products.

Additionally, the company intends to expand its product offerings, including dairy produce, ready-made pastas, meats to granola bars and sparkling water, to more than 2000, by the end of 2020. Apart from these, the company will continue adding trendy items such as avocado toast salad kits, beet hummus and heat-and-serve roasted poblano mac and cheese to the brand’s portfolio. Further, the products will be categorized into kids, organic, seasonal and signature lines.  

This move will eventually replace Target's existing Archer Farms and Simply Balanced food brands. Additionally, it will reduce the number of product offerings under the Market Pantry brand. Having said that, customers’ old favorites from these brands will be available under the new label.

This move has been well received by insiders as Target has been able to come up with a unique strategy to win customers amid the dominance of private labels. The launch of Good & Gather provides the company with an opportunity to strengthen its position in the food & beverage arena. Apart from this, the company seeks to improve customers’ in-store experience by offering them a better assortment of products with increased reliability along with same-day delivery.

Over the last few years, Target has been investing heavily in groceries in wake of stiff competition from other giant grocery retailers namely Amazon AMZN, Kroger KR and Walmart WMT. Moreover, it has added same-day delivery options, undertaken steps to enhance prepared foods and private-label offerings, and revamped in-store assortments and presentations along with supply-chain initiatives.

We note that shares of this Zacks Rank #2 (Buy) company have rallied 20.3% in the past three months, outperforming the industry’s growth of 7.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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