On Target or not? Yet another small grocery brand?

Target is the ultimate brand in cool retail. The store that has instant brand recognition is now launching a mini-market grocery store concept, a store-within-a-store, that will be expanding throughout the U.S. over the next two years. They are adding to their limited line of food and cold case items to be a true mini-market. The name is P-Fresh.

These stores are not the first on the block with this concept. British-based Tesco launched Fresh & Easy convenience markets about two years ago and now has 126 free standing stores. And what about the pioneer in this field, Trader Joe’s, with 356 stores, which invented the whole going-small-with-fresh-stuff grocery concept? Is there room for one more small store brand?

Target’s entry with P-Fresh will add substantially to the already glutted grocery store square-footage in the United States, where more and more retailers are competing for the same number of consumer dollars. How does a retailer differentiate its brand and attract customers?

These mini-grocery stores offer a limited range of fresh foods and grocery items and operate on the concept of convenience-oriented grocery shopping with a heavy dominance of in-store branded products. The big difference is the P-Fresh markets are a store-within-a-store concept. They will all be inside a Target. So will they really exist as a separate brand to consumers? I don’t really think so. The Target brand has such equity and value, why try to create another brand? Why not sub-brand this as Target-Fresh and create a connection through the parent brand? But the name P-Fresh– what are they thinking?

As for Fresh & Easy, they have highly visible freestanding stores. This adds brand presence to the shopping experience. With a focus on healthier foods, fast shopping experience, and smaller stores this brand is already doing what Target wants to do and is more recognizable as a brand.

Trader Joe’s is the ultimate in distinctiveness, it’s reinvention of the small convenience store concept, the advantage of being more established, quirky and outside the box of conventional grocery retail makes them very memorable. Their unique environments and tropical themes announce that they are not the same as other retailers. And being small, they can fit into many more locations than a Target and thus provide more convenience to customers. Their brand is unique, effective and builds customer loyalty by its sheer presence (it’s claimed by realtors that a TJ’s increases the neighboring residential real estate values). I don’t think P-Fresh will ever do this.