Target takes on Costco by offering bulk-buying at its stores

The aisles of Target are rarely, if ever, criticized for their diminutive nature. But until recently, shoppers who prefer to buy in packages so large that they can't help but save money had to wander the even bigger aisles of warehouse stores like Costco and Sam's Club. Not anymore.

For the next seven weeks, Target will offer big bulk items like extremely large packages of paper towels in its seasonal aisles (typically used for post-holiday merchandise markdowns in January and February), says company spokesperson Jana O'Leary. Target is calling it the Great Save Event, which will go through February 21 at all of the company's 1,740 stores.
While the event is being marketed as a way to fill your shopping cart with with bottles of laundry soap, packs of t-shirts, and dozens of rolls of toilet paper, the sale is not just about enormous multi-packs. The company's web site also advertises deals on items like a Spiderman quilt for $16 (down from $34); the complete first season of NCIS for $29.30 (save $10.68); and a 5% price cut on an Apple iPod Touch 32GB (bollocks! I just bought one). Other deals will also be found inside stores, such as women's t-shirts for $4 each and a six-pack of bath towels for $19.99, says O'Leary.

Yes: this looks very much like a mini Costco-within-a-Target. "We're excited to offer a warehouse club-like experience, with a fun Target twist," says O'Leary.

According to BNET's retail analyst Mike Duff, the move makes perfect sense, and is consistent with Target's "Expect More. Pay Less" strategy: "It all adds up to an attempt to create more reasons for consumers to visit the store more often, which is important at a time when shoppers remain reluctant to spend on things other than necessities unless they believe they're getting significant bargains," he says.

It will also be great for Target's bottom line. The sort of savvy shopper who has been shopping at Costco will be easily convinced to switch those dollars to Target; especially given the chain's reputation for its trendy fashion offerings.

In the end, will this bulk-buying event be great for consumers' bottom lines? Probably not. Sure, you can skip the warehouse membership fee for now. (Target says it has no plans to offer year-round bulk bargains; and management isn't sure yet whether the event will be repeated next year.) But shoppers tend to spend a lot more money per visit when they feel they're saving on a per-unit basis; meaning you're probably going to end up buying things you don't need. Maybe that's why O'Leary says the company is "pleased with early results."

It's a savvy move for the chain. But don't feel too virtuous if you skip Costco and spend your toilet paper bucks in Target's Great Save Event aisles. If you do enter those well-lit Target aisles, you'll need to restrain yourself from diving for the deals on handbags or scooping up House: Seasons 1-5. And remember: big packages do not always mean big price cuts. As always when buying in bulk, check your unit price against the smaller serving sizes.

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