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Target

Northern Light

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I've been in Target a few times.

Discount stores are not really my thing, but curiosity aside, they can be handy places for oddities (a new TV remote for instance).

My overall impression is that they are highly competitive (for the market) in bedding, towels, and electronics. They are un-even (price wise) on cooking/small appliance housewares, with Canadian Tire and other posting similar and sometimes cheaper prices on the same items.

Their grocery prices are a minor disaster; they are barely in line with 'conventional' grocers, never mind discounters.

***

Prices aside, I think inventory issues have been the source of most customer irritation. I went in the other day to buy a new 'bed in a bag' for my elderly mom, who isn't the least bit fussy about such things, and just needed something new. They had a decent (average) product of that type........except ZERO that fit a double bed, on a shelf that could have held several dozen (they didn't have most colours in the other sizes either).

I asked staff about it was was told 'we haven't had that shelf properly stocked in the 5 months we've been open, no one can explain it'

I also asked if other Target's had what i was looking for.......they had to phone the other store, because they have no access to inventory of other stores online.

:O

I mean what? Canadian Tire w/their old primitive monochrome computers could do that in the last century.

At the other store they still had to physically check the shelf!!!!

For corporate behemoth known for its leading edge use of customer analytics that blows my mind.

I will say they don't appear to be very busy at all; and its not surprising, between inventory issues and prices that at best 'don't stand out' and at worst are a bit high relative to market-peers.....

All in all, a flubbed market entry.
 
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DHLawrence85

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Checking the shelf was probably an insurance measure. In-store inventory counts are consistently off; they were when I worked in big box land.
 

bAuHaUs

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Learning pains...they will figure it out.
 

gabe

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Target in Canada doesn't carry the same array of products/brands like the Target's in the US. Also, a friend of mine who is doing back to school shopping for her kids told me Target's pricing is significantly more expensive than Walmart's. Which i believe, just look at Walmarts parking lot compared to Target's!
 

kalvinone

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There is one thing Target is good for - clearance items... I read from another thread about toy's - and when I got there, I did find some cheap toys that were on clearance and pretty good prices... reg. 30 @ toys r us - went for 7.50. reg. 2 online - went for 0.49 - so not too bad. Also their RAID ant killers / seasonal isn't too bad when I went.. was on sale for 6.50 reg at Walmart was 8.99... add in a few coupons and checkout51 - ended up being like 3.50 each - pretty good. Not sure about anything else though.
 

airplane-dude

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I think the problem isn't Target as much as it is us. We all expected that the stores should be exactly like the American counterparts. Well, it really wasn't going to happen. I will echo that they're prices seem too high but given time I think they will bring their prices down a bit.

Also think back to the first few years Walmart was around.. I don't think they were always crowded like they are today. It takes time to get that way...
 

AlvinofDiaspar

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gabe:

Actually I am quite happy with Target - was just doing some Xmas shopping and some of the stuff are definitely not available elsewhere. That, and not having to deal with crazed shoppers in a depot setting helps.

AoD
 

gabe

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gabe:

Actually I am quite happy with Target - was just doing some Xmas shopping and some of the stuff are definitely not available elsewhere. That, and not having to deal with crazed shoppers in a depot setting helps.

AoD
I was in Target in Buffalo last weekend and the parking lot was full of cars with Ontario license plates, you couldn't buy a parking spot it was that packed!! Even though the store was packed the shelves were fully stocked and i didn't see any of the premium prices like the Target's here. If i lived closer like in the Niagara region, i would do most of my shopping in NY state until stores like Target narrow the price gap.

Target's woes in Canada deepen as consumers give retailer cold shoulder http://www.theglobeandmail.com/repo...nadian-expansion-costs-weigh/article15543619/

Canada is giving U.S. discounter Target Corp. the cold shoulder, and the snub is dragging down the retailer’s overall results.

The retailer’s costs of rolling out its much-hyped stores here, the first of which opened in March, are piling up while sales have failed to reach its goals. It now expects that the Canadian division’s drain on the company’s bottom line in 2013 will be between 95 cents (U.S.) and $1.05 a share, more than twice what it had once expected.

Industry analysts warn that it may not be in the black in Canada before 2015 or later. It had initially anticipated making a profit in the fourth quarter of this year.

“While our initial sales and profits in Canada have not met our expectations, we remain enthusiastic about the Canadian market and confident in the long-term success of these stores,” Gregg Steinhafel, chief executive officer of Target, said on Thursday.

Target was counting on Canada not only to bolster its financial results but also, as its first foray outside of the United States, to serve as a blueprint for future international growth. But the company has not been able to deliver on its slogan, “Expect more. Pay less.”

Many Canadians had shopped at Target stores south of the border and expected the same low prices and trendy fashions – and were disappointed on both counts.

Even when initial demand was strong, Target’s fledgling supply chain couldn’t keep up and shelves were often bare. And rivals here raced to raise their game.

The snags contributed to Target’s third-quarter profit tumbling 46 per cent to $341-million or 54 cents a share from $637-million or 97 cents a share. The year-earlier period included gains related to the sale of its credit-card receivables portfolio. Excluding items, adjusted profit fell to 84 cents a share from 90 cents. Revenue rose 1.9 per cent to $17.3-billion.

In Canada, the retailer generated sales of $333-million in its third quarter at a gross margin rate of 14.8 per cent, less than half of the company-wide margin of 30 per cent – a result of it having to clear out excess inventory at markdowns. With an operating loss of $238-million, the operations here reduced Target’s profit by 29 cents a share.

The retailer cut its profit outlook for the year as it prepares for what is expected to be a holiday season filled with deep discounts.

“Canada is clearly becoming a bigger challenge,” said Michael Exstein, retail analyst at Credit Suisse in New York. He lowered his fiscal 2013 profit estimate to $3.33 a share from $3.82 and to $4.15 a share from $4.50 for 2014.

Added David Strasser, retail analyst at Janney Capital Markets: “Canada will remain in the penalty box, and the burden remains on the company to show progress within the segment.”

Canada isn’t Target’s only problem. At its U.S. stores, traffic fell 1.3 per cent, marking the fourth consecutive quarter of declines. Third-quarter same-store sales grew 0.9 per cent as consumers tightened their wallets in an uncertain economy. “The U.S. trends remain volatile,” Mr. Strasser said.

Target isn’t alone in its struggle with sluggish consumer spending. Same-store sales at outlets open a year or more slipped 0.3 per cent in the quarter at arch-rival Wal-Mart Stores Inc., and 1.3 per cent at its Canadian stores.

Target, which will have launched 124 stores in Canada by Friday, is racing to improve its distribution and better predict shopping patterns to stock stores more accurately, Mr. Steinhafel said.

“We continue to believe that our Canadian segment will contribute meaningfully to Target sales and profits over time,” he said. “We also believe the sales shortfalls and earnings dilution from excess inventory and startup costs will moderate next year, leading to significant improvement in the Canadian segment profitability in 2014.”

The company’s heavy clearance sales – especially among apparel and home goods – are helping to send a low-price message to consumers, he said. And Target has ramped up its marketing spending to tout its prices, Tony Fisher, president of the Canadian division, said in an interview.

But he said the retailer doesn’t need to lower its regular prices because its research has found that they’re on par with those of Wal-Mart and other rivals, even if they may be higher than some prices on comparable items south of the border.

“As we look at our pricing in Canada, on like items, we are right on where we want to be,” said John Mulligan, Target’s chief financial officer. “We are locally competitive.”

Mr. Mulligan said he expects pressure on the Canadian segment’s gross margins to persist in the fourth quarter “as we continue to do whatever it takes to enter 2014 with improved operations and a notably better inventory position.”

Mr. Fisher said Target already is seeing improved results at the first waves of stores it launched in Canada.
 

AlvinofDiaspar

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gabe:

I think the price expectation is a flip side of high level of exposure to the Target brand - like, do we really demand US prices in other US based retail chains in Canada (Wal-Mart, etc?). I think the expectation was a bit unrealistic. As to selection, no complaints in that regard - actually I find the Target in the US (at least NF) a bit run down compared to those in TO.

AoD
 

gabe

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gabe:

I think the price expectation is a flip side of high level of exposure to the Target brand - like, do we really demand US prices in other US based retail chains in Canada (Wal-Mart, etc?). I think the expectation was a bit unrealistic. As to selection, no complaints in that regard - actually I find the Target in the US (at least NF) a bit run down compared to those in TO.

AoD
Yes we do. J. Crew lowered their prices after all the backlash from Canadian shoppers. Walmart Canada a few years back, price matched all DVD/CDs/books with their American store prices. Just last year Walmart lowered prices on over thousand products last year.

Once all Target stores are open in Canada, i think you will see some major changes, better pricing more selections, better brands etc..

Yes some Target stores in the states are run down. So what? Every Walmart store i have been to in Canada/US is run down and a disorganized mess, but it doesn't stop hordes of people from shopping there.
 

FAC33

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Just another Target experience to relate. I like Target and will always go there first over Walmart, just because even the busy ones are never insanely busy and I think their store brand stuff is better than at Walmart. I went there over the weekend looking for underwear--nothing special, just standard issue Fruit of the Loom/Hanes stuff. The selection left something to be desired--huge swaths of empty shelf space and what I could find in my size had been opened. I reluctantly went to Walmart, where I found fully-stocked shelves and actual choices in my size. Target really has to solve this stocking issue or risk losing a lot of customer goodwill.
 

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