MINNEAPOLIS — COVID may have crimped certain aspects of Target Corp.’s food and beverage business last year, but over the past quarter the Minneapolis-based retailer made significant strides to recoup some of that lost traffic.
“Food and beverage delivered low double-digit growth in the second quarter,” A. Christina Hennington, chief growth officer, said during an Aug. 18 conference call with analysts to discuss second-quarter results. “Performance was led by our bakery, cafe and deli businesses, which grew more than 50% as these departments were closed during part of the second quarter last year. We also saw double-digit growth in our fresh categories, benefiting from an expansion in the number of items available for Drive Up. In fact, nearly half of this year’s growth in our produce business has been driven by the growth in Drive Up orders.”
In pointing out how food and beverage has been a source of strength for Target, Ms. Hennington stressed the importance of the retailer’s own brands and how consumers have been drawn to them.
“Good & Gather and Favorite Day are growing because they're just so relevant,” she said. “They taste delicious. They look great. They're across the whole portfolio, and guests are finding them easily amongst the assortment.”
Ms. Hennington said Target has seen an increase in owned-brand penetration within its food and beverage business of about 70 basis points compared with last year.
Overall, net income at Target in the second quarter ended July 31 was $1.82 billion, equal to $3.68 per share on the common stock, up 7.4% from $1.69 billion, or $3.38 per share, in the same period a year ago. Total revenues totaled $25.16 billion, up 9.5% from $22.98 billion.