Target Opening, Cabela's Opening

The old Zellers now Target at Southdale Centre on Lakewood Boulevard

This is the day that Target opens three locations in Manitoba, two in Winnipeg and one in Brandon. The first to open in Winnipeg is the Southdale Centre location and Kildonan Place. Both of these stores occupy old Zellers locations.

There are likely only a few people who will mourn Zellers. It never did live up to potential, didn't capture the population like say... Canadian Tire, never became anyone's first choice for anything really. In the end, the smart move for Hudson Bay Company was to sell off the leases and use the money to at least save HBC. And it worked if the retail sales from last quarter of 2012 are to be believed. HBC is doing much better.

Target will be a huge improvement in retailing in Winnipeg and Canada. Each store has undergone a $10 million refurbishment. The Polo Park and Grant Park future locations will likely be much more.

I think the one disappointment people will have is that prices are not going to be as low as stores in Grand Forks or Fargo. Taxes and tariffs only count for a part of what the difference is. There is logistics involved as well and far greater competition in the U.S. To be blunt, world-wide manufacturers figure to have higher margins in Canada because it is considered less competitive or of value than the U.S. market. This forces Canadian retailers to charge more.

The only way to slowly force the prices down to something we see in the U.S. is for successful retailers like Target to be in the market. The scale needed and the competitive drive will certainly help.

What Canadians don't know and probably don't care since it doesn't affect them is that the U.S. government subsidizes or runs at a loss things that help make U.S. prices lower. And by that I mean the Interstate highway system and decades long support from the federal government, subsidized airports that don't charge user fees and a post office that loses money in the billions.

Imagine how that affects prices. A company can ship a product on a federally subsidized highway, place it in the mail offering free shipping cause of the subsidized mail and it can be sent via air because of federally subsidized airports.

As mentioned, Canadian don't care that this might not be sustainable in the U.S....they just wonder how it is that clothes cost so much cheaper there.

The stagnant sales over the last few years in the U.S. have meant that U.S. retailer are casting their eyes northward. We have seen a steady stream of U.S. stores and restaurants come up and we will see a lot more.

Target is not the only one to open up this week. On Thursday, Cabela's opens up their Seasons of Tuxedo location. It is a massive store and is sure to attract people from inside and outside the city to shop there. The fact that Winnipeg is head office to the Canadian operations will pay dividends for years.

A few closures to mention. After 52 years, Gord's Ski shop has shuttered its doors. The owner indicated the Kenaston location and poor snows over two winters along with a decline in snowboarding capped the iconic company.

Curiously, Dolce Vita in Polo Park is locked up in a dispute with Cadillac Fairfew, operators of the mall. No word on their St. Vital Centre location.