Target to Add a Chobani Cafe at Its Newest Small Format Store

"Through Target's flexible-format stores, we're able to build customized stores in urban neighborhoods-like the Tribeca store-to make it easier for guests to shop," said Anne Stanchfield, vice president, Flexible Formats and Localization at Target. "There are a number of things we're excited to share with guests who shop the Tribeca store, including the freshness and convenience of Chobani Café, trendy and affordable apparel and home products and a merchandise presentation that will make it fun and easy to shop."

For Chobani, the new cafe inside Target will be its second retail location since having opened a successful standalone store in the trendy SoHo neighborhood in 2012. Since its launch, the cafe has doubled in size to 800 square feet and has also doubled the size of it menu, venturing into savory yogurt concoctions featuring chopped-up cucumbers and olive oil to spread on tortilla chips, hearty soups, and sandwiches with a Mediterranean flair.


"We always wanted to open a second cafe, and the timing just worked out with Target -- the downtown area in Manhattan is booming and is very dynamic," explained Chobani's Chief Marketing and Brand Officer Peter McGuinness in an interview with TheStreet. McGuinness said Chobani isn't planning to open more cafes inside of Target right now, but will be moving ahead with opening two to three more standalone cafes this year and up to 10 in 2017 possibly in urban areas in New York City, Los Angeles, San Francisco and Chicago. 

Judging by the performance of Chobani's SoHo location, the cafe in Target may see some nice traffic.

When TheStreet talked with McGuinness last May, he noted that same-store sales at the SoHo cafe were up an impressive 100% year over year. Same-store sales last year wound up increasing 89%, says McGuinness, and are up a healthy 25% so far in 2016 vs. gains of over 80% a year ago. 

"We see a [viable] model in retail now because of the performance of our Prince Street location [SoHo], and we are going to open up many more of these stores," said McGuinness.

For Target, the addition of a Greek yogurt cafe continues the evolution of its restaurant area that began at 14 stores last October.

At that time, fast-casual chain Freshii went into nine stores. Yum! Brands' (YUM - Get Report)  Pizza Hut opened restaurants in three stores featuring a limited menu of "artisan" pizzas, such as margherita and barbecue chicken. And two Minneapolis stores landed D'Amico & Sons, a local Italian restaurant whose menu includes toppings such as organic goat cheese and arugula.

About 1,700 out of Target's roughly 1,800 stores have cafes.

"While we do not believe Target is immune from competitive pressures, we remain optimistic on shares as well as the company as it continues to execute on its key initiatives in digital, signature categories, food/grocery and the supply chain," said Jim Cramer and Jack Mohr of Action Alerts PLUS in a recent note.  (Source: ByBrian Sozzi, TheStreet,.com)