Big-Box Briefing: Target sees sales boom in reinvented snack category

This comes as Target has completed its largest reset of center-store grocery in more than a decade, Cara Sylvester, evp and chief merchandising officer for Target, told reporters prior to the company’s earnings release.

“Our aspiration is to move our food business from a basket builder while you’re at Target to actually a reason why you come to Target,” Sylvester said. “That’s why we made such a significant bet in food this year.”

The company changed the presentation of almost half of its center-store grocery assortment, Sylvester added during the company’s conference call with investors Wednesday morning. This included both end caps and in-aisle presentation. She said the company was focused on giving more space to products centered on wellness, global flavors, newness and emerging brands — where the company believes consumers’ buying habits are headed and where Target can provide a unique assortment.

Sylvester said the company has early evidence that these changes are driving trips and growth in the grocery space. “We’re seeing momentum in areas like protein and better-for-you snacking really gaining share in some of the emerging brands and the categories where we’ve invested.”

Protein bars, meat sticks and “better-for-you” snacking options, in particular, have seen “outstanding momentum,” Sylvester told investors. Founders of snacking brands in these categories told Modern Retail they have noticed a shift in Target’s buying focus over the past year and in the company’s refreshed assortment.

“They are definitely prioritizing brands that are bringing innovation, excitement and newness to their grocery aisle,” said Jordan Carpenter, co-founder and co-CEO of Cadootz, a brand of protein crackers. Cadootz only just launched as a direct-to-consumer brand in January and arrived in Target stores with five SKUs in June, including multi-packs of smaller snack bags that are exclusive to the retailer.

Target has doubled the space allotted to meat snacks in the aisle throughout the chain, two different founders of brands in this space told Modern Retail.

Jason Burke, founder of meat sticks brand New Primal, said he had been pitching Target on ideas and products for a decade but was rejected every time, as buyers weren’t yet convinced of the consumer appeal. New Primal finally launched in 500 Target stores last June with two products. This June, it expanded to all Target locations with full-size chicken sticks inspired by rotisserie chicken and buffalo chicken, as well as mini sticks.

Meat snacks sales grew 6.6% in 2025 into a $5.5 billion business as GLP-1 medications increased interest in nutrient-dense snacks, Fortune reported, citing Bank of America research.

Burke said he has watched Target shift from being driven by national CPG conglomerates to being driven by emerging brands. “In the past two to three years, the entire narrative has changed on their part.” While some executives, such as Sylvester and CEO Michael Fiddelke, have been with Target for decades, Burke added that he has seen many new category managers or directors join the company’s buying team with fresh ideas.

Craft jerky brand Righteous Felon also got the chance to roll out both full-size and mini meat sticks in all Target stores this summer, in flavors such as barbecue and “street taco.” Brendan Cawley, the brand’s founder and CEO, said he first met with Target about three years ago. He said he worked with Target to develop a brand of mini sticks exclusive to Target for lunches or after-school snacks.

But Cawley said he was surprised by the number of new meat sticks that entered the assortment at the same time with similar offerings in terms of units per pack. “We’re all still trying to find how we fit into that category amongst all the new players.”

Burke expects Target to eventually slim its meat sticks assortment after casting such a wide net this year. He said this happened in the beverage category as Target brought in so many new alternative sodas, sparkling waters and energy drinks. For example, Target appears to have removed some of its Good & Gather private-label caffeinated sparkling waters about a year ago, according to various complaints on social media and a search of Target’s e-commerce website.

“The assortment will condense a little bit, in terms of the amount of brands in the snacking aisle,” Burke said. “But I think you’ll see the same level of innovation of new items, new flavors, new formats.”

What we’ve heard

“We continue to operate in what I call ‘frozen housing market conditions,’ but we also know that we’re taking share and that we’re serving our customers better every day. … They’ve told us they have the means to spend, they’re just hesitant. … While we’re happy with their level of engagement in the first half, they do tell us they’re worried about inflation, about fuel costs and about general uncertainty, and so there is a little bit of hesitancy there as the project gets bigger.”

–The Home Depot CFO Richard McPhail told CNBC as the company reported slightly better-than-expected revenue for the second quarter

Numbers to know

85%: Percentage of Sprouts Farmers Market stores that carry fresh meat that flows through its own distribution centers.

3: Number of Michaels stores that now have its new experiential store concept, including new floral departments, a new Pinterest Trend Bar, and expanded framing and personalization services.

13%: Year-over-year decline in SNAP participation after federal policy changes that tightened eligibility requirements.

What we’ve covered

Target receives almost $1 billion in tariff refunds, plans to lower prices

Target received $994 million in pre-tax tariff refunds during the second quarter, the company reported in its earnings release Wednesday morning. The tariff refunds boosted Target’s second-quarter operating income 94% year over year to about $2.6 billion, or 9.6% of sales. They improved the company’s full-year operating income margin rate by about 90 basis points to around 6%. When asked how the company expects that value to flow through to customers or into the business, Target CFO Jim Lee told reporters Tuesday ahead of earnings that the company will invest in price reductions.

Target builds digital-twin platform to improve inventory availability

Target developed Proxima, an in-house digital twin of its inventory positioning system that handles getting products from regional distribution centers to stores. Proxima uses the same data and logic as Target’s live inventory platform to test how decisions could play out before applying them in practice, the company said. Target said this helps teams improve product availability for guests, reduce potential disruptions across the supply chain, and test and modernize complex supply chain processes with more certainty.

Retail construction hits record lows, making it hard to find space

Recently, retailers have had a hard time finding spaces for new stores. The problem is that few buildings are going up to begin with. Retail construction completions fell to 5.7 million square feet in the second quarter, setting record lows for both quarterly and rolling four-quarter totals, according to CBRE. The commercial real estate firm cited rising construction costs and labor shortages. The low level of construction has kept the availability of retail space tight. Retail space availability held at an extremely low 4.9% in the second quarter, according to the real estate firm.

What we’re reading

Walmart store workers have a new responsibility: correcting AI errors

With Walmart’s rollout of AI agents, employees often have to spend time training the software about their jobs, Business Insider reported. People on Reddit who say they work for the company have complained about perplexing security alerts from AI, how the AI is measuring their performance and other issues, according to the outlet. For example, a store-level HR manager told Business Insider that an agent would assign tasks to employees and then assume employees were “going to be perfect every single time” at those tasks.

Synchrony, credit card issuer to Amazon and Walmart, partners with OpenAI for ChatGPT shopping

Synchrony Financial, which issues credit cards for Amazon, Walmart and Lowe’s, is working with OpenAI to let shoppers buy products directly inside ChatGPT using their store cards, CNBC reported. While currently ChatGPT routes customers to brands’ websites to complete purchases, it has signed deals with financial institutions like Visa and Stripe to move toward in-chat purchases. Maran Nalluswami, Synchrony’s chief strategy officer, told CNBC it could take months to get its store cards embedded into ChatGPT.

Walmart equipping a store with Symbotic fulfillment system

Automation company Symbotic recently began installing an e-commerce fulfillment system in the back of an undisclosed Walmart store, according to Supply Chain Dive. The company’s CEO, Richard Cohen, said the plan is to eventually scale a version of this to more Walmart stores — though the version being scaled may end up being smaller and more efficient than the current system. This is through a partnership as part of Walmart’s sale of its robotics arm to Symbotic last year.