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Target is rolling out fresh grocery pickup nationwide, starting with the Midwest

Target today is joining the growing number of grocery retailers offering curbside and in-store pickup services for fresh and frozen items. The retailer had paused its plans to roll out grocery pickup this spring, citing the COVID-19 pandemic as a factor. It said it didn't have time to train employees on the new processes. Today, those plans are back in motion. The company now says it expects to have fresh and frozen grocery pickup available across 1,500 stores in the U.S. within a matter of months.

The addition isn't being powered by Target's grocery delivery service, Shipt, but will instead utilize store staff to pick and bag items — much as they do today for Target's existing Order Pickup and Drive Up services.

However, consumers won't have access to all of Target's fresh and frozen food items at launch. The pickup services will offer 750 fresh and frozen items on top of the thousands of non-perishables already available. This includes produce, dairy, bakery, meat and frozen products.

In the same order, shoppers can also pick from the more than 250,000 items available for pickup across categories like home, apparel, essentials and more.

A company spokesperson tells us the decision to limit fresh and frozen product selection to 750 items was related to how the service was used in early tests. The company found that Target shoppers largely used pickup to shop for grocery essentials in between larger trips to the store.

Both Drive Up and Order Pickup will offer the same product selection, we understand.

Target says the fresh and frozen items will be stored in temperature-controlled storage in the pickup area in the front of the store, until the customer arrives for their pickup. Some stores were already remodeled to accommodate this planned change. Others have required a small construction project to add temperature-controlled storage, due to coronavirus delays that impacted plans to fully remodel hundreds of stores.

The service is free to use and doesn't require an order minimum or membership. In addition, Target RedCard holders and Target Circle members will be able to utilize their discounts on the new grocery items, as well.

Target is currently rolling out fresh and frozen grocery in the Midwest region, following its successful tests of grocery pickup in the Twin Cities and Kansas City markets. This will make the service available to 400 stores. It expects to reach 1,500 stores by the U.S. holiday season.

The retailer is one of many grocers to now offer pickup services in the U.S. For Walmart, online grocery has played a large role in its growing e-commerce sales. In the fourth quarter of its fiscal 2019, ahead of the pandemic, Walmart’s e-commerce sales grew by 35%. As the coronavirus outbreak drove more shoppers to buy online and pickup outside of Walmart sales, the retailer reported a 74% jump in e-commerce sales in Q1.

Target, meanwhile, reported in Q1 its same-day services were growing in popularity as well, due to the pandemic. It even saw days where its volume of order pickup was twice as high as Cyber Monday. And on the Friday before Easter, it did more volume via Shipt's delivery service than it did in a typical week.

Also in Q1, Target's digital sales overall grew 141% while its combination of same-day services (Shipt, Drive Up and Order Pickup) grew 278%. Of the millions of shoppers using Drive Up, 40% were new to the service — an indication of how the pandemic has shifted consumer behavior.

But Q1 was not all good news for the retailer. It said it was spending more on labor, selling fewer high-margin items and writing down apparel and other goods that weren't selling due to the pandemic's influence on shoppers' needs. The company promised that its investments in online shopping options and its workforce — last week, for example, it raised its minimum wage to $15 per hour — would pay off in the long run.

“The speed and convenience of our fulfillment options are unmatched across the country, and they’ve become even more critical for our guests searching for easy and safe ways to shop during the pandemic. By adding fresh grocery to the pickup services our guests already love, we’re giving them even more reasons to shop at Target, said Target’s chief operating officer, John Mulligan, in a statement. “During a time when even more people are looking for different ways to get the items they need, we’ll continue to invest in making Target the easiest and safest place to shop,” he added.

 

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