Monday, January 17, 2011

Free Press Story - Target

Bartley Kives is a pretty good writer for the Free Press. His coverage of City Hall is always to be read. However, it looks like he not a big fan of Target. His story titled Taking aim at TARGET published on Sunday was fairly critical.

I think the first thing he points out in his criticism is that Walmart and Target in the U.S. are alike but somehow that Target doesn't get the mud flung at it that Walmart does in terms of how people feel about the store.

Well, clearly if that is happening then it is because the two stores have been doing something differently over the years.

Kives might be far too dismissive of one of the reasons women shop at Target.

More significantly, Target sells clothing middle-class women are willing to wear. Or at least that's what I'm told.

The prices might be slightly higher but affordable and fashionable clothes is a lot harder for women to achieve than for men in general. In this area, Target clearly does something different.

One of the things that Kives says about Walmart's arrival in 1994 is not necessarily true.

Few people cheered when Walmart came to Canada in 1994, when the chain was expected to wipe out independent businesses with the ruthless efficiency of The Borg, to use a pop-culture reference relevant at the time.

Actually, there were quite a few people who cheered. Woolco had become tired and had not kept up with the competition over the years. There was a strong possibility that if Woolco had not been bought over that they might have just shut down. There certainly seemed to be no willing buyers in Canada.

Walmart was a major factor in cross border shopping as well. The company's arrival in Canada slowed travel south considerably along with a weak dollar.

Also appreciated was a push to more competitive pricing. As Canadians are frequently reminded, the prices in Canada for many products even when the currency is high is often steep. Real Canadian Superstore and its parent company Loblaw's became a lot more price competitive.

By 1998, another weak U.S. retailer in Canada faltered in Kmart and Zellers felt the need to act and bought the company and shut down a lot of the stores and took over the best locations elsewhere. Four years earlier, they didn't seem to be interested in Woolco.

There was certainly some people in Canada who feared the presence of Walmart and big box stores, sprawl and a whole host of other issues that went with being a large company. But there were just as many who were happy that a weaker U.S. retailer was out and a stronger competitor in retailing was in.

Zellers has struggled for a few decades for some love. It has improved a bit but still hasn't found its feet like say...Canadian Tire. The improvements it has made came through two different U.S. owners over the last years.

When Target was looking to make a big splash in the market, there was a lot that Zellers had to offer. That thing was location. While Target might want to have some big stores in the future, Zellers has locations that will work for it now and could be strong in the future. Zellers also has a customer base that could be loyal to the new store as well.

Lastly, Kives has this to say:

Above all else, the end result is more homogeneity. And you can add that to the existing homogeneity that already makes Winnipeg's outskirts just as bland and ugly as the edges of every other major metropolitan area in North America.

A couple of years down the road, we'll have an Ikea store and a couple of Targets to go along with the Walmarts on suburban arteries clogged with McDonald's, Tim Hortons and Subway.

I understand the utter pointlessness of being upset about this. Just don't be offended if I decline to cheer on the process.

I think this is an entirely separate issue. If Kives is upset about car culture, suburbs, corporatism and large stores then he has far bigger concerns than just about Target coming to town.

In the end it comes down to this: A U.S. owned retailer called Zellers has been bought by a U.S. owned retailer called Target. The buyer has a reputation for success in price and product and an overall better marketing strategy than the seller.

Canadians will likely appreciate such a company.

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1 comment:

One Man Committee said...

The funny thing about Kives' complaint is that the City of Winnipeg has the power to prevent Target from setting up its bland power centres on the edge of the city. It has the authority to say no to Target, and that it won't be permitted to build massive big boxes. But for some reason it never seems to use that authority.

To wit: would anyone really agree that what Winnipeg needs is a massive new suburban big-box development - the largest commercial development in the city - on Kenaston Boulevard? Yet that's what we're getting. What city planning document supports something like that?

I think Kives' complaint should really be directed at the City, which actually has the power to control this sort of thing.