Dive Brief:

• Target will roll out its fresh grocery pickup service to stores nationwide this year, the company announced Thursday morning. More than 400 stores will have the service by the end of June and more than 1,500 will have it by the holidays.
• Available through Target's curbside and in-store pickup services, the fresh grocery program is free, doesn't require a minimum order amount and will include 750 products across dairy, bakery, produce, meat and frozen. The company currently offers pick up of more than 250,000 products, including non-perishable grocery products, apparel and home goods.
• Target began piloting fresh grocery pickup in early March but paused the program to focus on its pandemic response. Last month, executives announced Target had restarted the program in the Twin Cities and extended it to the Kansas City market.

Dive Insight:

Target's e-commerce sales have been impressive lately, but not having fresh grocery products available for pickup at a time when shoppers are clamoring for the service has been a glaring hole in the program.

Now the company is working to fill that hole and become even more of a one-stop shop for its customers. Target has a growing grocery assortment, from Boar's Head deli products to its new Good & Gather private label line. And the company has remained a pickup destination for hard goods and non-perishable grocery products, with e-commerce sales up 141% in its most recent financial quarter.

Adding fresh grocery products to its pickup service will get shoppers spending more money through a service that deepens chain loyalty. Following a shoppers' first pickup trip, Target executives have said overall spending goes up nearly 25%.

The question is whether Target will market the service aggressively and seek to become a primary grocery destination, or whether it's content letting shoppers top off their purchase of other products with a gallon of milk, a carton of eggs and some fresh produce.

Given the boom in e-commerce grocery lately, Target's competitive pricing and its growing assortment, the company could very well become a prime grocery pickup destination, even though it's late to the game. It will have to contend with grocers like Sprouts Farmers Market and Aldi that recently stepped up pickup availability, as well as stalwarts Kroger and Walmart. But none of those chains have the same cache as Target in non-grocery products.

Target also offers fresh grocery delivery through Shipt, its e-commerce service. But pickup has become the preferred option for many shoppers during the pandemic, the Wall Street Journal reported. According to Nielsen data cited by the paper, grocery pickup sales as of mid-June are up 81% compared to earlier this year, while delivery grew 33% during that time.