Report: Data breach takes toll on Target’s shopper penetration
BOSTON — Target’s pre-Christmas database breach not only affected the retailer’s fourth-quarter same-store sales, but also contributed to plummeting shopper penetration post-holiday, according to a new report by Kantar Retail.
Kantar Retail ShopperScape data indicates that just 33% of U.S. households reported shopping at Target or SuperTarget during January, the lowest penetration number for Target in the past three years, and a 22% decrease in penetration versus January 2013. The overall trend in Target’s past four-week shopper penetration has been on a downward trajectory for the past several years.
The retailer’s confirmation in mid-December of a major breach of its guests’ payment information proved a critical moment in exacerbating that decline, Kantar Retail stated.
“In the wake of that news, Target failed to reach a December ‘bump’ in penetration of the same magnitude as it has enjoyed in recent years,” noted Rachel McGuire, Kantar Retail senior analyst and co-author of the report. “Our shopper data reflects the extent to which this issue continues to influence shopper behavior.”
The shift away from shopping at Target in January varied among key segments of guests, but was most significant among its core guests — Gen X (i.e., shoppers 32 to 49 years old), who are more likely than any other cohort to shop Target — as well as lower-income shoppers, who tend to shop Target at a lower rate in general but whose penetration at Target declined by a full 30% from January 2013 to January 2014.
“Target is at a critical inflection point, as it strategizes how to win back the confidence of shoppers,” added Amy Koo, Kantar Retail senior analyst. “While the breach caused an immediate blow to sales and will affect traffic for some time to come, it also exposed the larger longstanding issue of Target’s fragile relationship with its less-engaged guests. While monthly guests demonstrated their commitment to Target since the breach, the same is not true for the less-engaged.”
Kantar Retail stated that, for suppliers, it has never been more important to keep best guests pleased with Target’s assortment and experience, particularly Gen Y, moms and higher-income households, as they navigate the bumpy road ahead. And particular focusalso should be given to the less-engaged guests, Gen X and lower-income households.
New Albertson’s buys five more Dominick’s stores; names president of Jewel-Osco
ITASCA, Ill. — New Albertson’s has acquired five Dominick’s locations and appointed Shane Sampson, currently president of the company’s Boston-based Shaw’s Division, as president of the Jewel-Osco division based in Chicago.
Sampson fills the role that had been held by interim division president Jim Rice since January 2014.
Sampson’s first project highlights the company’s commitment to investing in Chicago: Remodeling and reopening five additional former Dominick’s locations.
The company indicated that it is investing approximately $100 million in new projects and remodels for Jewel-Osco this year in the neighborhoods where it does business.
A fourth-generation grocer, Sampson started working at Albertsons as a courtesy clerk and held positions of increasing responsibility at the store, district and division levels. He also served as division president in the Intermountain and Florida divisions of Albertson’s. Prior to joining NAI in March 2013, he was SVP operations at Giant Food.
“Shane is an exceptional leader and his work at Shaw’s over the last year proves that he is the right executive to be at the helm of our largest division,” stated NAI COO Justin Dye. “Over the last year, we’ve focused on restoring Jewel-Osco’s tradition of excellence and commitment to Chicago and the surrounding area. Our customers deserve nothing less than the best, and we are striving for excellence. We are aspiring to be the best food and drug retailer in the neighborhoods that we are privileged to serve. Our team members have set our sights on having the best customer service around and truly the best in fresh foods, and not just with higher quality produce and our fresh juice bars in our remodeled stores, but also with expanded organics, fresh cuts of meat and amazing fresh meal selections. Our goal is to have all of our stores truly showcasing our passion for food and exceptional service. Likewise, Shane’s passion for the grocery business makes him a perfect fit for Jewel-Osco."
Two Supervalu board members, both with Cerberus, resign in wake of Safeway/Albertsons deal
MINNEAPOLIS — Supervalu on Thursday announced that two of its directors, Mark Neporent and Lenard Tessler, have stepped down from the board of directors effective immediately. Neporent and Tessler were both appointed to the board in 2013 as designees of Symphony Investors, a Cerberus Capital Management L.P.-led investor consortium, under the terms of the Tender Offer Agreement entered into with Symphony Investors and Cerberus in connection with Supervalu’s sale of five banners to an affiliate of Symphony Investors.
Symphony Investors owns approximately 20.9% of Supervalu’s outstanding common stock. Under the terms of the Tender Offer Agreement, Symphony Investors has the right to designate replacement directors for Neporent and Tessler.
Neporent is the COO and general counsel for Cerberus Capital Management. Tessler is the co-head of global private equity and senior managing director of Cerberus Capital Management. The two board members’ resignations followed the announcement of a definitive agreement under which AB Acquisition, an entity controlled by a Cerberus-led investor group, will acquire all outstanding shares of food retailer Safeway.
“In light of the transaction announced today, we felt it was in the best interests of Supervalu for us to resign our seats on the Supervalu board," Neporent said. "The directors who will be designated to replace Lenard and me under the Tender Offer Agreement are expected to be independent of both Cerberus and Supervalu and will add to Supervalu’s outstanding board.”
Commenting on the change in the board, Supervalu’s non-executive chairman Gerald Storch said, “I would like to thank Mark and Lenard for serving on Supervalu’s board of directors and for their important contributions during the transition period following the banner sale. We look forward to working with Cerberus to identify two new, highly-qualified director designees to replace Mark and Lenard, and who will help to lead our organization into the future.”
Supervalu’s board currently has nine members, including seven members who are independent directors under the New York Stock Exchange listing standards.