Target Closing 2 Small Stores in the San Francisco Bay Area

Predicting the demise of Sears & Kmart since 2017!
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by storewanderer »

If the store is really closing... I am sure it has nothing to do with theft. The company was likely planning to close the store for years. Despite its unusually large size for a store of its nature in San Francisco, central location near tons of mass transit, in a very visible and high traffic location. This closure if it is really closing I find to be quite shocking. I cannot imagine the lease rate on this store but if they are losing $25k a day to theft it would probably be cheaper to pay the lease for a closed store.

I still think they should impose a no outside bags (that includes reusable bags) or backpack policy and see what happens... don't let any of that stuff up the escalator. Install lockers at that pathetic looking wannabe Apple Store-like electronics display down at ground level. Yes lockers don't look "cool" but the reality of the situation at this point is you need a functional store, not a "cool looking" store. See what happens. The reality is people are using these outside bags to blend as normal shoppers and maximize the amount of product they can take. Looking at recent photos of the store almost all customers are leaving with brand new super thick plastic bags anyway paying the 25 cent bag fee so at this point the few who show up with a reusable bag are very likely using it to shoplift.

Also- why are self checkouts in use at a store with a theft problem? That should be the first thing to go...

Limit how many people can shop at one time. There have to be some creative solutions. Target needs to figure this out. If the best and more sophisticated loss prevention program in retail can't figure this out, I don't know what to say. Self Serve Retail is finished in San Francisco if this is the case. Also if this store closes the theft will just spread out to the next nearest suburb locations. This problem does not go away just because you close the store.

Also the issue of people taking gift bags, backpacks, or other bags from store shelves and stuffing them with merchandise and running out of the store- okay- eliminate selling those items in this store. Or move them down to ground level and sell them down there only and don't allow them up onto the main sales floor on the second floor. Yes it sounds ridiculous but so is the theft situation in San Francisco. Eliminate the pathetic wanna-be Apple Store-like display of electronics down there on ground level and go this route. No self serve- all items would be by employee request only. Concern this counter would be robbed? Fine- make it card only. If someone wants to pay cash send them upstairs with the SKU then come back down and pick up the product. Sure it won't look "cool" but it will be a lot more functional than closing the store.

Losing the Target is BAD news for the core of San Francisco and the people in the area. Target was a source for a wide variety of goods at prices more affordable than other nearby options. Ignoring the folks shoplifting, the many other people who were trying to watch their expenses in this super high cost city and were paying customers of this store, will be the most hurt by the closure.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by TW-Upstate NY »

storewanderer wrote: October 21st, 2021, 11:58 pm Also- why are self checkouts in use at a store with a theft problem? That should be the first thing to go...

Limit how many people can shop at one time. There have to be some creative solutions. Target needs to figure this out. If the best and more sophisticated loss prevention program in retail can't figure this out, I don't know what to say. Self Serve Retail is finished in San Francisco if this is the case. Also if this store closes the theft will just spread out to the next nearest suburb locations. This problem does not go away just because you close the store.

Also the issue of people taking gift bags, backpacks, or other bags from store shelves and stuffing them with merchandise and running out of the store- okay- eliminate selling those items in this store. Or move them down to ground level and sell them down there only and don't allow them up onto the main sales floor on the second floor. Yes it sounds ridiculous but so is the theft situation in San Francisco. Eliminate the pathetic wanna-be Apple Store-like display of electronics down there on ground level and go this route. No self serve- all items would be by employee request only. Concern this counter would be robbed? Fine- make it card only. If someone wants to pay cash send them upstairs with the SKU then come back down and pick up the product. Sure it won't look "cool" but it will be a lot more functional than closing the store.

Losing the Target is BAD news for the core of San Francisco and the people in the area. Target was a source for a wide variety of goods at prices more affordable than other nearby options. Ignoring the folks shoplifting, the many other people who were trying to watch their expenses in this super high cost city and were paying customers of this store, will be the most hurt by the closure.
All good common sense solutions to the problem but how long do you think actual paying customers are going to want to deal with having to wait while an employee gets merchandise for them? People want to get in and get out. And it would be extremely labor intensive as well. Grocers recognized this decades ago and of course that's how the supermarket was born and other retailers followed suit. What might be a workable solution is to possibly make this a pick up only location for Target.com orders. That way, city residents would still be able to take advantage of Target pricing vs. other stores in that area of the city.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by Alpha8472 »

There is one other CityTarget in San Francisco at the former huge art deco Sears store. That is not as big and was rebranded to a regular Target years ago.

That one may be in a better neighborhood. However, if that one is the only big Target left, then that store will be overrun by the homeless. Although, maybe the homeless will not be able to get over there as it is a long journey through crowded streets and over gigantic hills.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by storewanderer »

TW-Upstate NY wrote: October 22nd, 2021, 2:08 pm All good common sense solutions to the problem but how long do you think actual paying customers are going to want to deal with having to wait while an employee gets merchandise for them? People want to get in and get out. And it would be extremely labor intensive as well. Grocers recognized this decades ago and of course that's how the supermarket was born and other retailers followed suit. What might be a workable solution is to possibly make this a pick up only location for Target.com orders. That way, city residents would still be able to take advantage of Target pricing vs. other stores in that area of the city.
Well, how many customers would it impact to put all of the "bags" in an employee serve area? They would be able to pull sales data. If 20% of customers bought one of these items, it would be a huge mess. If only 1% of customers bought one of these items, it would not impact much.

We don't know for sure if the shoplifters are helping themselves to bags, backpacks, etc. from the store floor then shoplifting into them either. But I'm sure the folks in the store know how often that is happening.

And maybe if it is around the holidays and you know a lot of folks will be after gift bags you put the display of gift bags up around checkout- do a single line checkout and "barricade" it in with the gift bag displays on either side of the waiting area.

Same goes around back to school- backpack time- again- find a spot to put them where they are how should we say, not easily taken onto the sales floor.

I think a pick up only location is a great idea but this is a high profile/high visibility location. It may be a way to ride out the lease. Otherwise for pick up only they could find a basement somewhere to run that out of.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by storewanderer »

Supposedly the store is not closing but they are closing a small Target in the Financial District (not surprising).

I guess we will see what happens in coming months. I can see why they may not want to give advance notice of an upcoming closure given the situation taking place in this location with theft and whatever other issues they are having. It may also be one last cry for help to get the city to do something...
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by Alpha8472 »

Target says they are not closing the big Target at the Metreon. It was all lies from a online website claiming to be a news site.

Target says the small Target is closing, but not due to theft. It was underperforming.

The newspaper that published the false information has ties to conservative politicians.

https://www.sfgate.com/bayarea/article/ ... 555010.php
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by storewanderer »

Alpha8472 wrote: October 23rd, 2021, 4:43 pm Target says they are not closing the big Target at the Metreon. It was all lies from a online website claiming to be a news site.

Target says the small Target is closing, but not due to theft. It was underperforming.

The newspaper that published the false information has ties to conservative politicians.

https://www.sfgate.com/bayarea/article/ ... 555010.php
SF Gate says this:
"The article was written by Ken Kurson, the owner of a holding company that publishes the California Globe and the former editor-in-chief of the Observer in New York, appointed in 2013 by then-publisher Jared Kushner, Ivanka Trump's husband and an official in former President Donald Trump's administration."

It would really spoil the narrative for SF Gate to do a complete reporting job and note that Jared Kushner was a democrat until 2009 and an "independent" until 2018. So to link the article writer having "ties" to conservative politicians doesn't quite line up with the timing there.

It does call into question the rest of the article such as the part of the article saying the store has $25k in theft a day, which comes out to over $9 million a year. But we don't know if the store is intended to be closed at a later date and it wasn't officially announced yet. Let's see what happens in the coming months. I still would be very surprised to see this store close however.

Also for SF Gate who is trying to downplay the shoplifting problems causing issues for retailers in San Francisco: completely out of touch, misleading. Nowhere else is Target only open 9 AM to 6 PM. Nowhere else do as many stores have armed cops present than in San Francisco for as many hours a day.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by buckguy »

Does a small format Target even do $9M/year in volume? The average Target does something like $40M. SFGate can have its own biases, but the original article sounds like its riddled with inaccuracies.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by storewanderer »

buckguy wrote: October 24th, 2021, 6:47 am Does a small format Target even do $9M/year in volume? The average Target does something like $40M. SFGate can have its own biases, but the original article sounds like its riddled with inaccuracies.
There is no way the small Financial District Target did $9m a year.

As I said in my original post- I doubted the Meteron Store was closing.

And if it isn't really closing it calls all other information in the article into question.

But we will see what happens in coming months. No secret there are huge shoplifting issues in San Francisco impacting retail there in a way it has never been impacted before in the US, whether people want to admit it or not.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by ClownLoach »

storewanderer wrote: October 24th, 2021, 8:21 pm
buckguy wrote: October 24th, 2021, 6:47 am Does a small format Target even do $9M/year in volume? The average Target does something like $40M. SFGate can have its own biases, but the original article sounds like its riddled with inaccuracies.
There is no way the small Financial District Target did $9m a year.

As I said in my original post- I doubted the Meteron Store was closing.

And if it isn't really closing it calls all other information in the article into question.

But we will see what happens in coming months. No secret there are huge shoplifting issues in San Francisco impacting retail there in a way it has never been impacted before in the US, whether people want to admit it or not.
I suspect that some of these numbers are inaccurate about Metreon, but that there is truth overall to this story. First, shrink is measured at cost. Even as bad as San Francisco is right now, and it is very bad, the $25K a day metric is probably at retail not cost. All it takes is 30 shoplifters a day each stealing $950... And the shoplifters do know to steal less than $950 because it's a guarantee that they will not be prosecuted below that "magic number.". The highest cost/lowest margin electronic items aren't going to be out on the sales floor in this environment, like TV sets and game consoles. But at least 30 shoplifters a day loading a reusable bag and walking out sounds realistic.

So I'm going to say they're probably losing $10K a day at cost which is still staggering. That puts shrink at $3.65M. The average Target does $40M and this one is definitely a chunk higher, so let's say it is doing $50M. That still puts shrink at 7.3% which is astronomical. Nobody will keep doors open with consistent 7.3% shrink.

Whether you believe the writers or not, there are some specific details to pay attention to. The store opened in 2012. It is not a Target owned/built building - most of the urban stores are leased. So they are operating on a lower margin than the typical owned store.

Target is large enough to do 25 year leases - first term 10 years, then 5 year renewals after that with term guarantees past the 25 (because who would want to kick out a Target? They always get guaranteed term).

The fact this place opened in 2012, the fact that they are operating in the highest labor cost market in the US when you factor in San Francisco's outrageous "predictive schedule law" where you have to write retail schedules at least 3 weeks before they start - and if the employer makes any change every employee affected automatically gets a 8 hour pay supplement for each change... With schedules having to change all the time due to the labor shortage and people quitting or calling out for weeks at a time due to COVID quarantines, the predictive schedule law is murder on stores. You in theory could work only two days a week but your schedule gets changed three times and now you're paid as a full time employee.

I think this is a lease negotiating tactic and shrink test at same time.

They're probably screaming bloody murder to the landlord - if you don't give us a massive rent reduction due to the fact that we are being robbed blind daily and can't operate safely outside 9-6 hours, which by the way are the hardest hours to staff any retailer - then they're out at the 10 year mark which is right around the corner. The store is going to close without a rent reduction to offset all these shrink costs. And Target usually does a group of store closures in January, some years more than others. I completely believe this is happening right now and the story is a leak intended to add fuel to the fire. Don't get me started on the brain dead politicians who don't understand the difference between revenue and profit, the idiot Mayor probably thinks that since Target is a multi billion dollar company they can afford these losses.

At the same time they're testing tactics I've never seen at a Target, even Compton and Inglewood in LA. Glass cases on soap? Laundry detergent? Closing at 6pm? That's hard core loss prevention that borders on what I call sales prevention. Let's face it, nobody wants to shop at the store for embarrassing personal hygiene products when you have to get someone to unlock the glass case and walk the item to the register. Nobody wants to shop before 6pm. But it is probably a test to see if they can save the store or not.

I believe that the fate is undecided, but not a good outlook. If the LP tests work out (maybe they will see more Drive Up sales to offset the difficulty of locked cases?) AND they get a massive rent reduction then they will keep it open. But first opportunity to close is coming up. For a flagship it's concerning seeing those pictures indicating that due to lower margin from shrink they haven't done any of the recent remodel updates when other stores have had as many as three full floor to ceiling remodels in the last 5 years (like Encinitas which just got redone a third time, converted to polished concrete floors and a real surprise, open warehouse ceilings painted black over the front end of the store). Personally I doubt they can afford to raise labor further to handle a store full of lockup cases. And if the landlord is heavily leveraged they may not be able to afford a significant reduction that would allow Target to stay. Sometimes it's better for the landlord to take the tax write off of a closed tenant for years instead of giving a rent reduction. Or maybe they're renegotiating to drop it to a small format store due to the shrink (like they did in Portland).

Remember that just over the bridge Walmart had a supercenter in Emeryville that did over $300M a year and had 500+ employees. It had astronomical shrink measured in the millions, multiple assaults and homicides, and they closed the doors continuing to pay rent on a closed building. Same thing in Downtown Long Beach, massive high volume store but the shrink and violence caused them to leave. They're still paying the rent there too so the community is stuck with nothing but an El Super as Walmart put everything else out of business.

I think this store is on life support and the prognosis is not good.
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