- Target is expanding its retail accelerator program globally by partnering with Germany-based food retail and wholesale giant Metro AG. The move aims to open up Target's program to international product and service providers, the retailer noted in a release.
- Startups that are admitted to the 14-week program will work with Target at its Minneapolis headquarters and with Metro at its Berlin offices. Each company gets a $120,000 initial investment and must pitch their business to Target, Metro and Techstars, the venture firm that has partnered with Target during the three years its accelerator program has operated. Company applications are due Feb. 24, with this year's program kicking off in May.
- Target mentored 10 startups each year during the first three years of the Techstars partnership, and the company says it is still working with more than a dozen of these outfits. The Techstars program launched in 2015 in Minneapolis and is one of four accelerator programs Target offers, including Target Takeoff, Target Incubator and the Target Accelerator Program in Bangalore.
Target has been trying to improve its grocery business for the past few years to compete with competitors like Walmart and it has made improvements over time. The addition of food retailer and wholesaler Metro AG to its accelerator program could help the retailer give grocery a boost.
In the food and grocery business, accelerator programs are known for being beneficial to both parties. Large companies can help give startups a boost while startups can give big corporations like Target new ideas and an inside track on sourcing promising new offerings. With Metro AG involved, startups will not only come from further afield but have a chance to hone their food retail sales acumen.
Target has shown in recent years that it has a big appetite for exclusive products, including beverages and snacks. The retailer is also continuing to build out its private label brands, including the grocery line Archer Farms. Having access to and helping shape up-and-coming businesses increases Target's chances of finding the next big product, ingredient, marketing claim or technology.
This move joins the many others Target has made to improve this aspect of its business. Last year Target hired two new senior food and beverage executives. Recently it tested a sustainable sushi line in select New York City locations to help bring its often neglected prepared food selection to life. It’s also worked on store remodels, made supply chain improvements so perishables are fresher and delivered more efficiently. The retailer has also been pushing to elevate its beer and wine selection.
Metro AG, on the other hand, is going through its own corporate restructuring. The company is in the middle of separating its retail and wholesale operations. In September, the retail conglomerate put its 288 store Real grocery chain up for sale. It said it wants to focus its efforts on its wholesale business. Currently, Metro AG operates 760 cash-and-carry stores in 25 countries which supply food products to restaurants, small businesses and hotels.