Target revamps curbside pickup with fresh, frozen grocery options

• Target is boosting its pickup and drive-up capabilities for customers looking to buy groceries on the go.
• Shoppers in the Midwest will now be able to add fresh and frozen items like milk and ice cream to their in-store pickup and drive-up orders.
• Target said that fresh and frozen offerings will be available for pick-up and driveup customers at 400 stores by the end of June.
• Moody's retail analyst Charlie O'Shea released a statement saying that the move will likely "will increase sales and shopping frequency."

Target is bolstering its pickup and drive-up capabilities as consumers in the United States continue to seek out contactless or reduced-contact shopping methods during the coronavirus pandemic.

The Minnesota-based retail giant announced on Thursday that it will introduce "fresh and frozen grocery items" to its free order pickup and drive-up services. After a successful pilot in the Kansas City and Twin Cities markets, shoppers throughout the Midwestern United States will be able to add milk, eggs, and ice cream to their usual pickup and drive-up baskets.

Target is introducing this revamped service at a time when consumers concerned about COVID-19 risks are turning to alternative methods of shopping. A Mastercard survey of 17,000 consumers around the globe found that 79% of customers are using contactless payments for necessary purchases in February and March.

Meanwhile, Target is also competing with rivals like Walmart and Kroger as the battle for grocery fulfillment heats up. Walmart offers free same-day grocery pickup that features employees loading groceries into customers' cars. Kroger customers also have access to free grocery pickup.

"The speed and convenience of our fulfillment options are unmatched across the country, and they've become even more critical for our guests searching for easy and safe ways to shop during the pandemic," Chief Operating Officer John Mulligan said in a statement on Target's website. "By adding fresh grocery to the pickup services our guests already love, we're giving them even more reasons to shop at Target."

Target estimated that the revamped service will roll out to 400 stores by the end of June, and over 1,500 locations before the 2020 holiday season.

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"Target's announcement that it was expanding food offerings for curbside pickup will increase sales and shopping frequency, the combination of which will likely minimize the negative impact on margin, and is therefore credit positive," stated Moody's retail analyst Charlie O'Shea.

Currently, Target's pickup and drive-up services feature 250,000 available items. In-store order pickup is available at all Targets, while drive-up orders are offered at around 1,750 stores. O'Shea said that the expanded drive-up and pickup capabilities have been "in the works" since before the pandemic hit and that the move will serve to "broaden Target's customer base" and potentially boost sales.

Currently, drive-up orders are only available through Target's app. The shopping method is contactless, according to Target's post on the company's coronavirus response. On its website, the retailer said that Target employees "will scan your pickup bar code through the window and place your items in your car trunk or back seat."