News

Target aims to revamp food supply chain strategy, store closures loom as well

Target, facing pressures from online and brick-and-mortar competitors, is shuttering over a dozen failing stores and aims to revamp its food-supply chain strategy.

November 5, 2015

In a move to ensure better inventory and less shortage situations with its retail food products, Target is assessing potential partnerships with third-party venues, according to a Reuters report.

The current situation, which has been one of frustration for the mega retailer and its consumers, is a "Frankenstein" food supply chain system, stated COO John Mulligan, according to the Reuters report.

"There is an opportunity to use some partners who may be able to do things a little bit better," Mulligan said in a recent interview, according to Reuters.

Target's focus on shoring up its food product operations comes as more and more non-food operations are striving to provide customers, wanting retail products and the ability to grab some quick food items, with a one-stop shopping experience online and in brick-and-mortar environments.

Mulligan was promoted into his current role at the end of summer, after serving as CFO, to direct the new food-supply chain effort.

According to Reuters, the partnership list may include SuperValu and wholesale co-operatives Affiliated Foods Midwest and URM Stores.

In related company news, Target is closing 13 stores due to poor revenue performance, according to a Fortune report. The stores, according to Fortune, have experienced declining profits for many years. Target runs 1,800 stores nationwide. The news comes after Target shuttered its expansion strategy into Canada, which Fortune said resulted in a loss of $7 billion.

Target is just the latest retailer to announce store closings this year. Also on the list are J.C. Penney and Macy's.