Give shoppers the consistent products they know, keep the prices competitive, promote them aggressively, and make sure they’re on the shelf when the customer arrives. That formula has worked since time immemorial – and it still does – but these days it’s not quite enough.
I spend a fair amount of time thinking about groceries from both sides of the shelf. I’m in stores regularly; I try to pay attention to what is moving and what is changing. I cook a lot, and I like building meals around what looks fresh and what is in season.
One of the clearest lessons we’ve learned is that the grocery shelf is never static. It is a reflection of consumer expectations, economics, and the industry’s evolving definition of what a grocery store should offer.
But beyond changing consumer behavior and shifting economics, something more fundamental is becoming clearer. The most important grocery item may be the one that didn’t exist six months ago.
Target Is Betting Big On Newness
The traditional supermarket is built largely around replenishment. Customers come in because they need something. Increasing sales of established products often requires increasing household penetration, taking share from a competitor, or persuading shoppers to buy more than they otherwise would.
There are only so many times a consumer will buy another gallon of milk, loaf of bread, or box of cereal. Innovation can create new demand and a source of growth that existing assortments cannot.
Today, the pursuit of ‘new’ is delivering oversized returns for retailers. Circana’s 2025 New Product Pacesetters research found that its top 200 new CPG launches generated $6.2 billion in first-year sales and contributed 21% of total store dollar growth.
The Circana research found that consumers are increasingly looking for functional-health products that deliver health, convenience, value, taste, or some other meaningful point of difference. High-protein claims, for example, were the most sought-after attribute among new food and beverage products.
That doesn’t mean that every new SKU is a winner. Most certainly are not. Nor does it mean retailers can simply add thousands of products to their shelves and expect growth to follow.
New products are driving demand, traffic, excitement and interest for the retailers delivering innovation. Target appears to be betting big on this.
In their March strategic plan, Target planned to increase the amount of newness across the assortment by nearly 50% and lead with innovation across owned, emerging, and national brands. It plans to give grocery more space and further infuse style into the grocery experience – which means more design, trend identification, emerging brands, seasonal displays, private label, and discovery.
The pundit reaction was predictable. Some saw the strategy as evidence that Target had lost its way in grocery. And to be certain: the company has plenty of other work to do. Its apparel and home sectors remain challenges. Analysts believe their merchandising overhauls can produce an immediate boost that is expected to moderate after two or three quarters. This new grocery direction must prove that the initial traffic and sales lift can persist after the novelty wears off.
I think the detractors have missed the larger point: Target is not trying to become another supermarket… at least not anymore. And their management was fairly explicit about that too. Their new goal is to build a grocery business that feels different, with more emerging brands, wellness products, owned brands, and products consumers could not find everywhere else.
I feel like that’s actually more in line with Target’s brand proposition. Another note of interest: 40% of Target guests surveyed said they were looking for something new when they shop for food.
Target is trying to institutionalize one of the most powerful reasons shoppers walk into a store: discovery.
Driving Shopper Discovery Trips
If I need milk, I am going to buy milk somewhere. There is very little excitement or differentiation in that purchase. But if I see a new protein snack, an interesting functional beverage, or an emerging brand that I have never tried, I may buy something I wasn’t planning to buy.
It hits on two really powerful human instincts. The first purchase is driven by need. The second is driven by curiosity… which can create frequency.
The early results suggest there may be something here.
In the first quarter, Target introduced 3,000 new food items and said those products were generating more than 50% greater sales than the assortment they replaced. In the second quarter, the company completed its largest food transition in more than a decade, changing nearly half of its center-store grocery assortment. Snack sales rose 15% following the transition, while Food & Beverage posted high-single-digit comparable sales growth.
Obviously, it would be too simplistic to say new products caused all of that growth. Target is also investing heavily in price, presentation, availability, fulfillment, and the overall shopping experience. The company has lowered prices on more than 10,000 items over the past year and is rebuilding its image after some egregious self-inflicted public relations fiascos have combined with consumers who are hyper-aware of value.
Product newness and discovery isn’t new. Many stores have excelled at this for years. I think what’s different here is the trends aligning with an entity with the scale and the “strategic urgency” to go big into this approach.
Retailers have become extremely sophisticated at managing price, promotion, inventory, and shelf productivity. Manufacturers have become equally sophisticated at defending established brands. Private labels have improved dramatically. Digital tools make price comparison easier than ever for consumers.
These forces make the existing grocery shelf increasingly competitive – and that’s not even getting into the macroeconomics of the industry.
Target is not simply adding more products to its shelves. It is trying to change the role grocery plays in its stores. Rather than treating food as another category to be optimized, it is trying to make the grocery aisle part of the reason people want to shop at Target in the first place.
That may prove to be a very important distinction part of this discussion – not just for Target, but for where grocery goes from here. We are entering an environment where maintaining the existing assortment, and doing it well, may not be enough.
Newness Changes The Equation
In my household, my lovely wife shops, while I buy. She looks around, she compares items, she hunts for new merchandise, and searches in new stores… and she can do it for hours. I go in with a set list to buy, and I come out achieving that mission in the shortest time possible.
The current economy has forced grocery consumers into becoming mission-based buyers instead of shoppers. If grocery wants to thrive in the future, we need to bring back the excitement, the simple pleasures, and the joy of shopping. It’s about discovery.
The opportunity is obvious. If retailers increasingly view new innovative products as traffic and growth generators, they might give consumers a reason to visit the store even when they don’t need anything in particular.
The warning is that “new” by itself will not be enough. The Circana data suggests that successful innovation is increasingly about solving a consumer problem or creating an experience, not simply changing the flavor, package, or marketing message.
More newness can create excitement, but it also creates complexity.
New SKUs require supply-chain capacity, merchandising discipline, inventory management, and a willingness to remove products that fail. A retailer cannot afford to turn every store into a laboratory without understanding what happens to productivity, labor, and working capital.
That may ultimately be the real test of a broad newness strategy.
The question isn’t whether consumers like new products. They clearly do. The question is whether retailers can systematically identify the products that deserve to become permanent parts of the assortment – at scale – while eliminating the ones that do not.
Target’s early experience is encouraging, but it is still early. That is why I think this story is worth watching – not because Target is suddenly becoming a different kind of supermarket, but because it may be testing a much larger proposition for the entire industry.
In their writings this month, Phil Lempert and Janani Ravi have dug into the incredible pantheon of global flavors hitting shelves and changing eating habits. These cultural additions and flavor profiles are absolutely the newness that consumers may not even realize they want.
My teen boys came home from middle school one day last year and introduced me to their new favorite shared snack of their lunchroom… dried nori sheets. These seaweed snack sheets would have never been on my bingo card for teen snack foods, but they are… and they’re delicious.
The quest for newness doesn’t always mean a global experience, but retailers and consumer product goods companies alike would be wise to pay attention to these flavors.
Editor’s Note: We’ve added someone new to our team this month who may be a familiar name to some of our readers – Donald Walker, a long-time industry executive and third-generation member of the business. Outside my office, we have a framed page from our October 1992 edition announcing the transition from Izzy Cohen to Pete Manos at Giant. At the bottom of that page is an advertisement from The Leaman Company – Mid-Atlantic Food Brokers, the company Don’s father worked with. It’s a small piece of history, but a fitting connection as Don joins us. We’re delighted to have Don on the team and wish him the best as he strengthens our advertising efforts.