Target’s Shipt Unit Launches 5-City Pilot to Help Small Retailers Grow

Online delivery service Shipt says it wants to enlist small businesses in its fight against food insecurity.

The Target-owned company said Monday (Feb. 6) it had launched LadderUp, an accelerator program that helps local small businesses compete by providing capital, eCommerce-centered tech assistance and education.

“Working with small businesses to build up their capabilities is a key part of our commitment to help create healthier, more resilient and equitable communities,” Shipt CEO Kamau Witherspoon said in a news release.

He added that the company aims to play a role in “both combating hunger in under-resourced communities” and boosting small, local retailers.

Shipt says it will provide each retailer who completes LadderUp with $5,000 to help invest in their eCommerce. The company is also working with Shopify, which will teach a course in the program and let retailers access their platform and build an online store front at no cost.

LadderUp is targeted to small businesses, with an emphasis on those owned by LGBTQ+ people and people of color. The program is open to businesses in five cities: Atlanta, Detroit, Houston, Washington, D.C. and Birmingham, Ala.

The launch of LadderUp follows last year’s debut of a Shipt initiative targeting healthy foods and nutritious meal planning. The company also said it plans to add ​​Supplemental Nutrition Assistance Program (SNAP) Electronic Benefits Transfer (EBT) payments for low-income shoppers this year.

Shipt is rolling out this new program as inflation is leading many consumers to cut back on their grocery spending.

Research from the most recent installment of PYMNTS’ Consumer Inflation Sentiment study “Consumer Inflation Sentiment: Perception Is Reality,” which drew on a survey of more than 2,100 consumers in December, showed that 69% of consumers have made changes to their grocery shopping lists in the past year to combat rising prices, with almost 6 in 10 reducing the quantities of items they are purchasing.

Consumers routinely overestimate the extent of food inflation compared to U.S. Bureau of Labor Statistics (BLS) data, PYMNTS noted. The study found that they view the increases in fresh meat or vegetable prices to be nearly six times greater than the actual rate, perceiving it as a 25.3% year over year increase versus the BLS-measured 4.5%.

Meanwhile, the gap was much tighter for packaged grocery products, perceived at 18.9% compared to the measured 15.7%.

“With consumers consistently turning to brick-and-mortar to get those fresh products while being open to eCommerce options for packaged goods, traditional retailers are disproportionately hurt by consumers’ overestimations of grocery inflation,” PYMNTS wrote.

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