Target’s financials are sinking, so why does it think wine and beer is the answer?
These are not good times for Target, the discount department store chain. Sales in the fourth quarter last year fell 4.3 percent, and its stock price is at a five-year low. The company’s solution? Wine and beer.
Its new, next-generation store will include a wine and beer boutique – because, of course, when sales are crummy, sell booze. Just ask Starbucks. Or, as the Target CEO news released, the “dedicated” wine and beer space will be done “with the goal of taking a customized approach to creating an enhanced shopping experience.”
And the bosses there wonder why their stock price is at a five-year low? Enhanced shopping experience, indeed.
Beer and wine won’t rescue Target. For one thing, the company is coming entirely too late to wine and beer sales, having been beaten to the punch by Costco, the continuing growth of Total Wine, and Kroger’s years-long push to upgrade its beer and wine departments. For another, Target – based on what I’ve seen about how it sells wine and beer – doesn’t understand how to do it well. They sell grocery store wine, much of it crummy, at higher prices than other grocery stores. Which is not the formula Costco used to became the largest wine retailer in the country and to control almost four percent of the U.S. wine market.
And none of this takes into account how Target will staff a beer and wine shop, given that service is not what the company is best known for.
Frankly, wine and beer at Target sounds like a consultant’s doing. They graph some Excel, flash some PowerPoint, and insert a breathless slide: “Costco’s booze sales grew 46 percent in five years — AND GROWS FASTER THAN ANYTHING ELSE!!!” The next thing you know, the company sends out a news release detailing the enhanced shopping experience.
So go to it, Target. Build that wine and beer boutique. I’ll even shop there. But when it doesn’t work, remember to thank me for my insight. And to call me before you do something this desperate again.
Image courtesy of Target using a Creative Commons license