1. Target’s Pfresh Grocery Growth Strategy Baking

2. Pfresh  Target’s Grocery Strategy  What is Pfresh?  Rollout plans  What this means for you  Future information  Target’s Grocery Strategy  What is Pfresh?  Rollout plans  What this means for you  Future information

3. Target’s Grocery Strategy  Drive Frequency and Guest trips  Communicate Value  Increase overall basket size  Dedication of Target resources for Grocery  $3 billion capital investment by TGT  Realization of margin mix pressure as grocery outpaces other areas in Target.  Drive Frequency and Guest trips  Communicate Value  Increase overall basket size  Dedication of Target resources for Grocery  $3 billion capital investment by TGT  Realization of margin mix pressure as grocery outpaces other areas in Target.

4. What is Pfresh?  Pfresh is a new store prototype that will change the way the Target guest shops for groceries.  Have the items that our guest needs to complete her grocery shopping list, making Target a viable option for her “fill-in” grocery trip.  The assortment will be focused on category breadth and will offer a selection of high-frequency perishable items; comprehensive dry, dairy and frozen food assortments; and expanded convenience foods in snacks and beverages.  Pfresh is a new store prototype that will change the way the Target guest shops for groceries.  Have the items that our guest needs to complete her grocery shopping list, making Target a viable option for her “fill-in” grocery trip.  The assortment will be focused on category breadth and will offer a selection of high-frequency perishable items; comprehensive dry, dairy and frozen food assortments; and expanded convenience foods in snacks and beverages.

5. What is Pfresh Cont.  Increased grocery space: 24/38 current sides of food to 55 sides in a Pfresh. Up to a 129% increase in space.  Extremely visible store location, able to be seen from the checkout lines.  In-store signage and an external media campaign will help drive store traffic.  Increased grocery space: 24/38 current sides of food to 55 sides in a Pfresh. Up to a 129% increase in space.  Extremely visible store location, able to be seen from the checkout lines.  In-store signage and an external media campaign will help drive store traffic.

6. Pfresh Photos

7. Pfresh Photos Cont.

8. Pfresh roll-out plans  Plan to roll-out approximately 1,000 stores within the next 3 years.  Target will use a “market blitz” approach for converting the stores. This means Target will focus its efforts on converting entire markets over rather than isolated openings.  The market blitz strategy will allow our marketing department to make larger statements in these markets.  In 2010 our focus will be on high volume markets  Plan to roll-out approximately 1,000 stores within the next 3 years.  Target will use a “market blitz” approach for converting the stores. This means Target will focus its efforts on converting entire markets over rather than isolated openings.  The market blitz strategy will allow our marketing department to make larger statements in these markets.  In 2010 our focus will be on high volume markets

9. What this means for you  During our upcoming line review we would like to have discussions surrounding:  Recommendations on Pfresh assortment  Volume impact and cost structure  Supply chain opportunities  Scans and volume rebates  Our goal is to have the right items for the guest at a blended margin that allows Target to continue to expand this format.  During our upcoming line review we would like to have discussions surrounding:  Recommendations on Pfresh assortment  Volume impact and cost structure  Supply chain opportunities  Scans and volume rebates  Our goal is to have the right items for the guest at a blended margin that allows Target to continue to expand this format.

10. Future Information  Feel free open the attachment below to read what the press has been saying about Pfresh.