Target's Latest Problem: Multiple Floor-Plan Disorder

Last Updated Aug 26, 2010 2:30 PM EDT

Once upon a time, Target (TGT) was the McDonald's (MCD) of discount stores, and customers visiting the chain anywhere that it operated in the United States could and did count on the same experience no matter where they shopped.

Now, the retailer has taken that certainty away from its customers, and the decision to do so may hurt it over time.

As it has remodeled to introduce produce and meat operations in its so-called P-Fresh discount stores, Target has decided to make significant changes to the general merchandise space. As a result, the retailer is running multiple floor plans in its traditional discount stores, and that doesn't take into consideration supercenters and urban locations that are laid out to fit available, unique spaces.

In creating so many variations on a theme, Target is abandoning the uniformity that was, ironically or not, part of its uniqueness. All the change is surprising because, until now, Target has been fanatical about uniformity, even generating charts for each store sub department and distributing them to clerks as a guarantee that merchandise was exactly where headquarters in Minneapolis wanted it. A complaint often raised about big discount stores, supercenters and warehouse clubs is that they are confusing and difficult to shop, So, when 100,000 square foot-plus stores of the sort Target operates put most everything in the same place and displays it in pretty much the same way, customers gain confidence they can find what they want in a reasonable time.

As it has expanded food over the past couple of years, Target inevitably made big store changes. First it repositioned and enlarged what had been called pantry departments. Then it added a floor plan it called expanded food, which not only made grocery and chilled food departments more massive but also changed their sales floor configuration. Finally, Target developed P-Fresh, which added fresh meat and produce to the expanded food format and changed store configurations one more time.

Last week's Target conference call revealed that management still can't stop fiddling. Starting this summer P-Fresh remodels will install new shoe department layouts in addition to updated electronics and home sections (pictured).

With 240 P-Fresh conversions planned for this year, Target can be more efficient doing all desired remodeling at once. And it actually has a second reason besides project efficiency to gussy up general merchandise. Gregg Steinhafel, Target's CEO, told conference call participants that P-Fresh stores subject to the general merchandise remodeling -- the ones being remodeled this year versus last -- have seen gains in cross shopping between edibles and the rest of the store. The first wave that only reworked food did not enjoy that improvement. Cross shopping has been a Target sore point, as its customers never seemed as eager as Walmart's to shop food and general merchandise on the same trip.

Which brings up another concern. Target is reconfiguring some of those general merchandise departments, particularly home and electronics, in ways that bring them closer in appearance to the stores Walmart (WMT) recently remodeled. So, Target customers find themselves shopping a store more like one they dismiss as an inferior shopping environment.

Even if Target has some reasons to tackle general merchandise as it adds food to P-Fresh stores, it may pay a long-term cost for what might turn out to be short-term benefits. Target once ensured its stores looked different from and more consistent than Walmart's. If it makes stores more confusing and less distinctive, isn't Target providing its shoppers fewer reasons to avoid its competitor?