For many Americans, a trip to Target (NYSE:TGT) brings to mind a shopping cart filled with throw pillows, makeup or a cute outfit.
The retailer wants more customers to think of it when checking off the grocery list, too.
Only 21% of Target’s annual sales came from food and beverage in the most recent fiscal year, according to the company’s financial filings. That’s a sharp difference from rival Walmart (NYSE:WMT) , which gets nearly 60% of its annual sales from the grocery aisles.
Yet as inflation-wary shoppers watch their budgets and focus on needs instead of wants, grocery has gained importance as a driver of foot traffic. Investors will learn this week if Target could help make up for softer sales of apparel, electronics and home goods by selling more boxes of pasta, gallons of milk and cartons of eggs. The company will report earnings before the bell Wednesday.
Target will post results as the company’s stock has fallen, driven in part by challenging pandemic comparisons and its own inventory missteps. Shares of Target closed Monday at $160.57, down nearly 30% from its 52-week high. TGT shares gave up $2.30, or 1.4%, early Tuesday to $158.27.
The big-box retailer also hopes by drawing shoppers for essentials like gallons of milk, it can nudge purchases of discretionary items that shoppers otherwise would not have bought.
