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Target May Outsource Grocery Supply Chain To Third Party

Target is seriously considering entering partnerships with third party companies to shore up the big box retailer’s fresh food supply chain and revamp its grocery business.

John Mulligan, Chief Operating Officer at Target, noted that while the retailer’s supply chain has grown, it has become a patchwork system that isn’t fully reliable.

“There is an opportunity to use some partners who may be able to do things a little bit better,” said Mulligan in an interview with Reuters. “I said to my team this looks like Frankenstein. We have made this thing out of a bunch of parts.”

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Although Target has not provided a timeline for any potential partnership decisions, or the names of any third parties, Reuters reported that potential candidates include SuperValu, Merchants Distributors, Inc., Affiliated Foods Midwest and URM Stores. None of the companies have commented on the matter.

Upon appointing Brian Cornell as Chairman and CEO in July 2014 and Anne Dament as its Senior VP of Merchandising in April 2015, Target began the process of realigning its food and grocery business, building more of an emphasis on healthier, organic foods. However, after unveiling a timeline for the overhaul in March that had major changes slated to occur in 2016, Target officials pushed back the rollout to 2017, according to the StarTribune.

 

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