Smart move by Target to open its first wave of Canadian stores in Ontario, as the province accounts for roughly one third of the nation’s 36 million residents and is home to Target Canada headquarters and distribution facilities.
Consistent with expectations around the new market entry, Target said the stores would open in March or early April as part of a larger strategy to open between 125 to 135 stores in Canada following the acquisition of 189 leases of Zellers locations. Those Zellers stores were not in good shape, and in order to bring them up to Target standards, the retailers is engaging in its own version of a Canadian stimulus package by investing between $10 million and $11 million in each location.
That’s a big budget for a remodeling project, but the stakes are high for Target as it needs to dazzle and delight new shoppers in Canada as it won’t get a second chance to make a favorable first impression. And assuming it does so in Ontario, there will be a ripple effect of positive energy and favorable media coverage throughout the country that will create buzz in other communities as they anticipate the arrival of “their” Target.
At least that’s how it is supposed to work if Target can effectively manage the expectations of Canadians, many of whom are familiar with the Target brand, and then exceeds them by delivering on the expect more, pay less value proposition in the context of Canada.
Meanwhile, in Western Canada, the Calgary Herald is reporting that the Target is building a distribution center in the town of Balzac just north of Calgary to support the retailer’s entry into the market next year. It is not a surprise that Target chose the Calgary area for its third Canadian distribution center as it is one of the nation’s major Western cities and a hub of distribution.
“The center will be approximately 1.3 million sq. ft. and will sit on just under 80 acres,” the paper quoted Target spokesperson Molly Synder as saying. The facility, as well as two other locations in Eastern Canada, is expected to be open by the time the company’s first stores open in early 2013. In the case of the facility near Calgary, it will be managed by a third party firm, Eleven Points Logistics.
“They will manage all recruitment and hiring and will communicate those needs and plans with local communities in the coming months,” added Sn