Can Target Find Its Place in the Big City
The article, ‘Can target find its place in the big city’ by Susan Berfield talks about stores in the market and markets in general. Susan notes that there are many different stores in America. Most of them are located in suburbs and built from scratch. The growing number of markets is the cause of the increased markets in America. This article seeks is to address the issue of markets and stores to determine ways in which they thrive in different markets and economic times.
Stores play a critical role in the U.S. economy. The last American frontier for major retailers for instance Target, are urban markets. For the very first time in decades, cities are developing an alarming rate even faster than exurbs and suburbs. The amazing thing about this concept is that young people who spend freely occupy the growing cities. In the era of online shopping, smaller shops are making economic sense. However, getting bigger is not as difficult as getting urban and small. For instance, the renown TSCO:LN spent much money on its 200 smaller stores before backing down and selling them (Berfield, 2014). In essence, it shows that it is more challenging to find the right locations along the downtown than in the wide-open suburbs. Ideally, this shows that it is even more complicated to handle the logistics of stocking stores without loading docks.
In any shopping district in the big city, the cheap-chick cachet of Target would appear to make it a natural fit. For more than a decade now, Wal-Mart Stores have been conducting tests with smaller stores. Target’s first smaller city store was opened in Chicago 18 months ago. Since then, Target has opened other stores in many states across America including Ore, Los Angeles, and Portland. In October last year, another four were opened in San Francisco. However, the company has for a long time planned to build more city stores and later strategize on what would work. Finding from this analysis bring about the question, how small is small. Mulligan, the chief financial officer notes that the number of options in real estate becomes much broader. In an August earnings call, Gregg Steinhafel the Chief Executive Officer noted that the company was making an analysis on the results of the City Target to establish if they are capable of reducing more space. Since then, the rapid expansion of Target into Canada has not taken the right direction as presumed.
Wal-Mart has opened close to 400 smaller stores of different sizes ranging from 15,000 sq. to 39,000 square feet. It has also announced its plans of opening more stores of this size in the next three years in various cities not necessarily in big cities. As a result, of the newly build stores, Wal-Mart’s neighborhood markets rose to 3.4% during the third quarter. However, the total comparable-store sales of the chain dropped to 0.3% (Berfield, 2014). Subsequently, Wal-Mart perceives its smaller stores as $12 billion market. However, the potential is huge for the Target.
Ideally, ‘Can Target Find Its Place in the Big City’ is an interesting article that brings to light much about stores and how they affect the market and business. I find the article very informative, precise, and coherent, in the sense that someone reading it can easily get a glimpse of its subject and what it basically entails. This article has a brilliant idea on how stores behave in the market. It is full of brilliant ideas and really I like how the how the article articulates the concept about market stores and how size affects their productivity and growth in the economy. For instance, it has gone to the specifics and outlined statistics of large companies such as Wal-Mart and Target. Secondly, giving actual figures when describing the growth of stores is not only realistic but also professional. I think it is easy for any investor with intentions of investing in stores to consult existing companies such as Wal-Mart that have dominated the industry. Unlike our perception that large stores make more money due to size, it is evident from the article that it is a perception many have.
In an ideal world, smaller stores thrive more compared to bigger stores. Markedly, this is one dominant concept that most people do not understand. I also believe that stores operate differently compared to other ventures such as stocks. It is for this that the growing number of markets is the cause of the increased markets in America. However, the article does not dwell much on the articulation of figures. For instance, it does not specify ways in which these stores could result to losses. In addition, I find it difficult to identify large stores and small stores in the market. For an investor for instance, it could be strenuous to identify the right channels to venture in, regarding stores. Ideally, this is one of the major weakness have found in the article. Suggestively, it would be best if the article was more elaborate on matters pertaining to the behavior of stores in the larger market, when comparing them with other markets across the globe. The article could give a comparison of the stores on a wider view, for instance, in the world in general.
To conclude, this article has addressed the issue of markets and stores determine to ways in which they thrive in different markets and economic times. Stores play a critical role in the economy not only in America, but in the larger world. There is a huge potential for smaller markets compared to bigger markets.
Berfield, Susan. 2014. Can Target Find Its Place in the Big City.