Target pours $1B into grocery push, chases new niche

Target is investing more than $1 billion in its U.S. grocery business in 2026, a move that represents about 20% of its capital budget as it chases a new niche in food retail.^[1]

The company says the outlay is roughly twice its typical annual food investment and will fund assortment and store upgrades aimed at boosting food sales.^[1] Target has added about 4,600 new food items, expanded produce and global foods, and opened a "food-forward" prototype with a grocery section roughly 30% larger than average.^[1]

Q2 food-and-beverage net sales rose 7% year-over-year, outpacing Target's overall 5.3% net-sales growth, and food-and-beverage were up 6.6% in the first half of 2026.^[1] Still, Target holds only about 2.4% of the U.S. grocery market while Walmart controls roughly 21.2%, and identical national-brand items average about 5% higher in price at Target than at Walmart.^[1]

Target is betting a larger fresh and global assortment will drive more store trips and lift margins as it pursues shoppers who want convenience plus specialty offerings.^[1] The push comes as rivals lean hard into value and low prices, leaving Target to balance assortment upgrades with pressure on price perception.

1. Minneapolis / St. Paul Business Journal