TGT Anxiety and the Future of Retail

[rapidacid]

Target (NYSE:TGT) announces it plans to pull out of Canada.
The company's ambitious entry into the nation is less than two years in.
A dose of reality from the retailer: "We were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021."
Target has 133 stores in operation in Canada.
TGT +7.2% to $79.70.

[Roadmap2Retire]

Wow! Im not surprised. Nobody liked Target here in Canada. When they came in, Canadians were excited thinking that we would see US-style pricing, which was no where to by found. Customers of course were hard to find....the occasional time I found myself in a mall - the TGT side of the mall was like ghost town.

Im sure Target's experience will serve as a case study for plenty of other firms in the future.

[Kerim]

Nice earnings report from TGT this morning. It is feeling more and more like the data breach and the Canada retreat provided a very nice entry point!

[Dividend Watcher]

(01-15-2015, 09:09 AM)Roadmap2Retire Wrote: Wow! Im not surprised. Nobody liked Target here in Canada. When they came in, Canadians were excited thinking that we would see US-style pricing, which was no where to by found.

R2R, can you expound upon this? Did you expect rock-bottom pricing just because it was TGT? I'm also not familiar with the corporate tax situation in Canada vs. the US. I wouldn't think there would be a difference in GST/HST either. I'm really baffled.

When I used to visit TO & MTL a lot, I used to peruse the shopping mecca's just to see new-to-me product lines and didn't see merchandising too out of whack with what I see locally. Maybe I was distracted by the French-Canadian women ( oooh-la-la ) strolling down Rue St. Catherine in the warmer weather.

Of course, we also don't have a Timmie's or Canadian Tire on every corner either.

[Jimbo]

(05-20-2015, 08:00 AM)Kerim Wrote: Nice earnings report from TGT this morning. It is feeling more and more like the data breach and the Canada retreat provided a very nice entry point!

Of course you only hear the "good buys" ( I have made my share of bad, in the past) but this is one I got into for 56.66 some time back. ;-)
Jim

[Roadmap2Retire]

(05-20-2015, 09:53 PM)Dividend Watcher Wrote:

(01-15-2015, 09:09 AM)Roadmap2Retire Wrote: Wow! Im not surprised. Nobody liked Target here in Canada. When they came in, Canadians were excited thinking that we would see US-style pricing, which was no where to by found.

R2R, can you expound upon this? Did you expect rock-bottom pricing just because it was TGT? I'm also not familiar with the corporate tax situation in Canada vs. the US. I wouldn't think there would be a difference in GST/HST either. I'm really baffled.

When I used to visit TO & MTL a lot, I used to peruse the shopping mecca's just to see new-to-me product lines and didn't see merchandising too out of whack with what I see locally. Maybe I was distracted by the French-Canadian women ( oooh-la-la ) strolling down Rue St. Catherine in the warmer weather.

Of course, we also don't have a Timmie's or Canadian Tire on every corner either.

DW,
I am not much of a consumer, so I dont really shop in places like WMT or TGT, but I do like to observe. Before TGT came to Canada, there were wild expectations that WMT and TGT will get into a fight to the bottom and consumers will benefit, even though there was evidence from the media that TGT will not be able to do that here (see this article from 2012). I think the rationale was that the import taxes imposed by Canada will not allow for rock bottom prices and consumers can expect more of the same. For whatever reason, consumers still expected better pricing and were disappointed after the doors opened.

Heres an article that lists lots of reasons on why TGT failed in Canada. The execution was very poorly done from what Ive read and observed - TGT bought Zellers, a Canadian chain and announced that they will convert them years in advance...their whole plan/strategy was laid out. This allowed the competition plenty of time to come up with their own strategy to combat Target's entry. So, even before the Target name went up on the stores, the competition was taking customers away. This is what I meant when I said "Target's experience will serve as a case study for plenty of other firms in the future."

Those French-Canadian girls sure are distracting It sure was one of the highlights of my time when I lived in Montreal.

Speaking of Cdn Tire, they've really grown by leaps and bounds lately. In the last two years, they are everywhere. I havent looked at the financials in a while, and needs a closer look.

[rayray]

I have been keeping an eye on TGT and WMT here and there, respectfully. I was and wanted to pull the trigger on WMT not that long ago but couldn't bring myself to push the BUY button. Why? I personally cannot shop at Walmart for several reasons. In my area the stores are filthy with empty shelves, unaccommodating employees, very cheap products and to top it off practically no registers open translating to long lines at check out time. Where is the PRIDE? Where is the QUALITY? I don't see it at WMT and until I personally see some turnaround with my own eyes I cannot put my money into a company I refuse to use myself.

Now, Target, on the other hand is a great place to go to as a consumer. The shelves are full, when I ask an employee where something is they take the time and WALK me to the product, the stores are very clean, and at checkout there is a manager directing the traffic at peak times. In fact, I cannot say a bad thing about their stores which prompts me to look at it harder as a potential investor.

I am going by my own personal shopping experiences. Maybe your area is different.


I also don't think online retailers will completely take out brick and mortar stores. Online shopping is great, Amazon does an amazingly great job to perfection right down to customer service, setting the bar high for any online retailer to follow, as they should. In our household, shopping online is a given; although, so is jumping in the car and heading to that brick and mortar store. Online retailers was and is more of a threat to brick and mortars like Circuit City and Radio Shack. I don't need to see a PC in order to know what I want or need, but I still want to see that jacket, shirt or to try on those shoes in person before I purchase the merchandise. And groceries? Forgetaboutit.