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Target Kickstarts its Grocery Game With New House Brands

Shoppers At Target Corp. Ahead Of Earnings ReportShoppers At Target Corp. Ahead Of Earnings Report
A customer looks at frozen food items for sale in the fresh grocery section inside the Target Store.Patrick T. Fallon—Bloomberg via Getty Images

Target is making its largest foray into selling food under its own brand, as it it attempts to energize grocery sales.

On Sept. 15, the discount chain will introduce 650 products to its grocery shelves under the brand Good & Gather. That will expand to 2,000 private label supermarket products by late next year.

At the same time, Target is phasing out its house food brands Archer Farms and Simply Balanced, as well as reducing its Market Pantry line. The company expects that Good & Gather to be a multi-billion dollar business by the end of next year.

The goods sold under the new brand range from pastas and meat to milk and eggs. Target said Monday the products will not have artificial flavors, synthetic colors, artificial sweeteners, or high fructose corn syrup.

The launch builds on Target's food and beverage business momentum, which includes seven straight quarters of sales growth at established stores and six straight quarters of market share growth with gains across almost every category of food.

It's also part of the retailer's broader effort to expand in house brands, which typically carry higher profit margins. By the end of 2019, Target will have more than 25 exclusive brands, including its children's clothing label Cat & Jack and men's clothing brand Goodfellow & Co.

Industry analysts say Target has to become more competitive in the grocery aisles.

"The new label is a major step forward that introduces excitement and interest to the food department," says Neil Saunders, managing director of GlobalData Retail. "Good & Gather both creates a more cohesive and compelling food offering as well as being a platform for the launch of some new and interesting lines which should entice consumers."

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