I was in Target today and for some reason I began to wonder why they have groceries. I've known for years that they sell groceries, but today it really seemed to bother me. Target is known for cheap but classy. They have found a way to compete with WalMart and I'm guessing they have slightly better margins. Groceries have very low margins. So what gives? I rarely see anyone buy the groceries there. Does anyone actually say "Hey I need milk, let's stop by Target?" They don't offer enough groceries to do all your shopping there, so why not free up that space for more merchandise?
I did make a mental note that with the exception of milk, they don't stock anything with a short shelf-life. And most of what they sell (milk, soda, frozen pizza, etc) are things someone might run out of midweek, that aren't worthy of a full grocery trip. So maybe that's the idea. But still, does that do enough for them financially that it's worth stealing space from the regular merchandise?