Target Expanding Private Brand Assortment

Despite a less-than-spectacular second quarter, Target officials continued to lean in on its assortment of private brands as the retailer looks to build on a product collection that annually accounts for $30 billion in sales.

During the company’s second quarter investor conference call, Christina Hennington, executive vice president and chief growth officer, said that within Target’s merchandising efforts, the company will continue investing in its own brand portfolio. 

One example of Target’s commitment to its own brand selection is its flagship Threshold brand, which Hennington said recently received a major facelift.

“With new branding, stronger price points, and a clarified aesthetic to help guests mix and match affordable styles for their homes, this brand will be even easier to love,” she said. 

Additionally, Target will be launching new owned brands in time for the holiday shopping season and expanding others currently in stores. This includes a new line of “quality and durable” kitchenware that Hennington said will make every day meal prep easier.

“Look for lots of newness on store shelves and online later this fall,” she added.

The retailer is also reacting quickly to trends in the marketplace to update its own brand assortments. Seeing increased demand for Stanley tumblers and cups, Target worked in partnership with Chip and Joanna Gaines to add exclusive colors to the product assortment that is part of the exclusive Hearth & Hand by Magnolia brand.

Hennington said Target also sharpened its focus on affordability with products aimed at college-bound students. This effort included strategic inventory bets and allocations in key markets that presented the largest market share opportunities to ensure the retailer was in stock during the important back-to-school/college season.

“Affordability goes well beyond a single season like back-to-school,” she said. “In fact, with many consumers making their decisions on where to shop based on affordability, we're highlighting the comprehensive value we provide through our $30 billion-plus owned brand portfolio.”

With new product collections in the offing, Hennington said Target is also focused on how consumers are spending. In the second quarter, total revenue was $24.8 billion, down 4.9% year-over-year. Comparable sales were down 5.4% as shoppers pulled back on buying discretionary products and focused on items in the food, beverage and beauty categories. 

“At the moment, given where the consumer is spending, we're leaning on the strength of our food and beverage portfolio and essentials and beauty, with beauty really being a highlight with double-digit growth,” she said. “Within discretionary, what we're seeing is that there are things that are very much working around newness and innovation. Our owned brand portfolio plays a huge role in delivering against those goals. We design, we create, we source, and we build assortments that (allow Target) to control a lot of those elements.”