Target’s ‘food forward’ strategy showing promise

MINNEAPOLIS — Target Corp. will continue leaning into high-growth food and beverage areas like protein, functional drinks and better-for-you snacking to grow its Food & Beverage category further in 2026, said Cara Sylvester, executive vice president and chief merchandising officer at Target.

“We introduced 3,000 new food items in Q1 alone, with sales from those items growing more than 50% over the prior assortment,” she said. “In food, guests tell us they’re looking for inspiration, new products, trending flavors and better-for-you options. Delivering on these priorities is the goal of our Food Forward strategy, evolving food from a category they shop while they’re at Target into a reason they choose to come to Target.”

As the company looks ahead to its 2026 second quarter, Sylvester said, “In food, we’ll be executing our largest transition in over a decade, resetting nearly half of our center store grocery assortment, accelerating our pace of newness by nearly 50% and better aligning to wellness trends, including the elimination of all certified synthetic colors from our cereal assortment.” 

Target also recently opened a new food distribution center in Colorado as part of its Food Forward strategy.

“When you think about that investment in fresh food, that leads to better in-stocks and better freshness in some of those most important, most frequently shopped categories,” said Lisa Roath, executive vice president, chief operating officer.

For its first quarter ended May 2, Target saw net sales rise to $25.4 billion, an increase of 7% compared with $23.8 billion in the first quarter a year ago. Comp sales increased nearly 6%, compared with negative 3.8% last year, while customer traffic increased 4.4%, compared with negative 2.4% a year ago. 

In the Food & Beverage category, Target’s first-quarter sales rose to $6.3 billion from $5.9 billion a year ago.

Target opened seven new stores during its first quarter, bringing the current total to 2,002. The company plans to open 30 more locations this year.

| Photo: ©SUNDRY PHOTOGRAPHY – STOCK.ADOBE.COM

“We believe this year’s higher tax refunds were a source of upside to consumer spending in Q1 and that benefit will be feeding over the rest of the year,” said Michael Fiddelke, chief executive officer. “While consumers have proven to be resilient so far, sentiment has been declining recently, and we’re keeping a close eye on their spending behavior. … While we have momentum, we’re also being cautious about the near-term operating environment, with consumers weighing multiple headwinds and tailwinds and recent dips in consumer sentiment.”

Target’s net earnings in the first quarter totaled $781 million, equal to $1.72 per share on the common stock, a drop of nearly 25% from $1.03 billion, or $2.28 per share, a year ago.

Jim Lee, chief financial officer, said the decline reflects “the impact of investments in additional hours and training for our field teams along with higher incentives, planned spending related to capital projects, higher marketing spend, and growth in general liability expense.” 

Target opened seven new stores during its first quarter, bringing the total to 2,002 as of May 2. The company plans to open 30 more locations this year. 

Based on its first-quarter results, Target is adjusting its outlook for the rest of the year, with net sales growth projected around 4% compared with 2% that was forecast at the end of fiscal 2025.

“We’re reporting first-quarter results that are stronger than expected, early proof points that give us confidence we’re on the right path,” Fiddelke said. “But to be clear, a single good quarter has never been our goal. Our goal is consistent long-term growth.”