Target Closing 2 Small Stores in the San Francisco Bay Area

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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by BillyGr »

mjhale wrote: March 31st, 2021, 4:58 pm The one small scale Target I visited is one the first floor of a new apartment building across from the University of Maryland campus. It reminded me of a drug store with an oversized grocery section. Not enough for a big shop but enough to get one or two things quickly. This location had an online order pick up counter right inside the door - very prominent. Nice store but why go there when I can go to a full line Target store and get everything I need in one shop.
One might suspect that location was the reason - as long as they could stock based on items that a college student would be looking for they are likely to get a fair amount of business (particularly if that college does, as some do where younger students don't have vehicles on campus - then the convenience of being able to walk to it is more important).
Reminds me of (probably one of the few) A&P Centennials that was still A&P operated (via Superfresh) to the end, right across from a college in Delaware, that likely survived for the same reasons, even though it was small compared to most markets at the time.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by timanny »

lake52 wrote: March 30th, 2021, 6:56 pm
Alpha8472 wrote: March 30th, 2021, 12:31 pm One San Francisco store and one Cupertino store will close. These are tiny 35 employee stores. The Cupertino store is in an affluent area in the same city as Apple's Headquarters.
The San Francisco store is also within walking distance of the Stonestown store which is currently being expanded into the former Nordstrom. IMO the Stonestown store is a much better location to begin with.

Cupertino also has a full sized store within relative walking distance. They probably were hoping this store would capitalize off the Vallco redevelopment which is progressing, but very slowly. Maybe they’ll try again once that starts to open.
Unless it's a completely new building as opposed to being completely refurbished, that full sized Cupertino Target within walking distance of the store being closed predates Target itself as a chain. It was the third Gemco store.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by buckguy »

Pick-up makes it easy to return stuff rather than boxing it up, etc., so it's cheaper for Target and the customer. It's also easier for stuff that's likely to leak, get broken, etc. than shipping. One of the hassles of delivery is theft and clueless Amazon people delivering to the wrong address. And during the pandemic, some people like having an excuse to get out of the house. Pick-up is a good long-term strategy and not bad in the interim.

Walmart had the small store concept forced on them by Wall Street. They never had their heart in it and they are generally less adaptable to odd sites than Target. Target was much quicker to enter urban areas and doesn't face neighborhood opposition--they seem to know how to do these stores well. I went to one in Arlington, VA recently and I was impressed at how much they'd been able put in the store space without it seeming to be crowded. Target knows how to fill niches, Walmart just wants to use the same model everywhere they can.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by storewanderer »

buckguy wrote: April 4th, 2021, 5:05 am Pick-up makes it easy to return stuff rather than boxing it up, etc., so it's cheaper for Target and the customer. It's also easier for stuff that's likely to leak, get broken, etc. than shipping. One of the hassles of delivery is theft and clueless Amazon people delivering to the wrong address. And during the pandemic, some people like having an excuse to get out of the house. Pick-up is a good long-term strategy and not bad in the interim.

Walmart had the small store concept forced on them by Wall Street. They never had their heart in it and they are generally less adaptable to odd sites than Target. Target was much quicker to enter urban areas and doesn't face neighborhood opposition--they seem to know how to do these stores well. I went to one in Arlington, VA recently and I was impressed at how much they'd been able put in the store space without it seeming to be crowded. Target knows how to fill niches, Walmart just wants to use the same model everywhere they can.
The issue I see for Target is what is the right "small size?" Is it 15,000 square feet, is it 30,000 square feet, is it 50,000 square feet since all qualify as smaller than the usual Target box?

I still suspect many of these small format Targets, specifically the ones below 30,000 square feet, are underperforming, in high rent locations, and losing money. Target gives credit to the store for online sales within a certain radius of the store which may help these stores look better on paper (at the expense of larger busier stores nearby that don't need credit for those sales anyway) but at some point reality will set in and someone will realize the online sales would happen no matter what and are not happening just because of the small stores. At this point they are trying to get a concept that works. I think a 50,000 square foot model is more along the lines of what may work long term for them.

The pandemic and fewer people in big cities/working in offices everyday will be a convenient excuse to blame for why the little 15,000 square foot versions don't work anymore but in reality they were always a concept that would fail.

Wal Mart knows how to do Supercenter (and to a lesser extent the conventional discount store). Any other format they do, never works. Their gas station concept with tiny c-store seems good to me but given how few they have built must not be so good for them. But they sure know how to do Supercenter. I guess it is easier when you have no legitimate competition to speak of in most of the US for your format. More like inept competitors like Target who had a perfect foundation to build a "better Supercenter" but failed to try and as a result failed with their Supercenter concept and have stopped building Super Targets, closed some Super Targets, and rebranded other Super Targets to regular Target- and the stores still carrying the Super Target flag have a worse grocery and fresh product program than Wal Mart because Target refuses to spend the labor necessary to run a quality meat, produce, bakery, and deli operation and treats the Super Targets like a giant P-Fresh.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by pseudo3d »

storewanderer wrote: April 4th, 2021, 10:56 am
buckguy wrote: April 4th, 2021, 5:05 am Pick-up makes it easy to return stuff rather than boxing it up, etc., so it's cheaper for Target and the customer. It's also easier for stuff that's likely to leak, get broken, etc. than shipping. One of the hassles of delivery is theft and clueless Amazon people delivering to the wrong address. And during the pandemic, some people like having an excuse to get out of the house. Pick-up is a good long-term strategy and not bad in the interim.

Walmart had the small store concept forced on them by Wall Street. They never had their heart in it and they are generally less adaptable to odd sites than Target. Target was much quicker to enter urban areas and doesn't face neighborhood opposition--they seem to know how to do these stores well. I went to one in Arlington, VA recently and I was impressed at how much they'd been able put in the store space without it seeming to be crowded. Target knows how to fill niches, Walmart just wants to use the same model everywhere they can.
The issue I see for Target is what is the right "small size?" Is it 15,000 square feet, is it 30,000 square feet, is it 50,000 square feet since all qualify as smaller than the usual Target box?

I still suspect many of these small format Targets, specifically the ones below 30,000 square feet, are underperforming, in high rent locations, and losing money. Target gives credit to the store for online sales within a certain radius of the store which may help these stores look better on paper (at the expense of larger busier stores nearby that don't need credit for those sales anyway) but at some point reality will set in and someone will realize the online sales would happen no matter what and are not happening just because of the small stores. At this point they are trying to get a concept that works. I think a 50,000 square foot model is more along the lines of what may work long term for them.

The pandemic and fewer people in big cities/working in offices everyday will be a convenient excuse to blame for why the little 15,000 square foot versions don't work anymore but in reality they were always a concept that would fail.

Wal Mart knows how to do Supercenter (and to a lesser extent the conventional discount store). Any other format they do, never works. Their gas station concept with tiny c-store seems good to me but given how few they have built must not be so good for them. But they sure know how to do Supercenter. I guess it is easier when you have no legitimate competition to speak of in most of the US for your format. More like inept competitors like Target who had a perfect foundation to build a "better Supercenter" but failed to try and as a result failed with their Supercenter concept and have stopped building Super Targets, closed some Super Targets, and rebranded other Super Targets to regular Target- and the stores still carrying the Super Target flag have a worse grocery and fresh product program than Wal Mart because Target refuses to spend the labor necessary to run a quality meat, produce, bakery, and deli operation and treats the Super Targets like a giant P-Fresh.
Walmart Supercenter was basically developed by Walton after years of research into other grocery stores and grocery/discount hybrids, it worked because he put the effort into it. Some of that has been streamlined and altered over the years, not necessarily for the better, but they never strayed too far from the core formula. It also helps, of course, that there's really nothing like it, and even the supermarkets that try to add to more lines are still a bit of a ways off (soft lines at grocery stores are usually abysmal, for instance) and aren't national competitors.

Target was never really into the full grocery hybrid game, they never played around with European-style hypermarkets like Wal-Mart and Kmart did, they never kept it open 24 hours, and they never started to replace regular Target stores with it. The biggest problem I see with Target is they're too love in with their own brand and have changed so much of their line that it's not even a discount department store anymore. They also messed up their own brand with this "small store" nonsense, used to be that Targets were a pretty consistent square footage and similar floorplans.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by Romr123 »

I'm always dazzled at a wander through a SuperTarget (that's all they've got in metro Kansas City since they entered there so late) but realize it's all showbiz, and that there's very little "there" there...particularly around fresh goods (they do private label dry groceries very well). I don't think I could do all my shopping there--even as I snatch up "fresh" meat with markdown coupons at my nearby pFresh in Michigan. I do need to caveat that I've not been into a WalMart in >20 years, but Meijer is so good at the supercenter concept (particularly in exactly the categories I'd expect to be dire at WalMart---fresh produce/meat/fish/deli and customized/localized mix on specialty/international merchandise) that I have trouble believing that WalMart could keep up (which is why you see relatively few WM in Michigan). Recent travel out to Oregon...driving by Fred Meyer...didn't go in any of the stores but the external appearance particularly in the smaller cities is horribly offputting---look like Family Dollar/Dollar General prefab buildings metastatizing...perhaps that "rough and ready" appearance (made me think of Alaska, actually) is part of their charm?
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by SamSpade »

Romr123 wrote: April 4th, 2021, 2:35 pm Recent travel out to Oregon...driving by Fred Meyer...didn't go in any of the stores but the external appearance particularly in the smaller cities is horribly offputting---look like Family Dollar/Dollar General prefab buildings metastatizing...perhaps that "rough and ready" appearance (made me think of Alaska, actually) is part of their charm?
Off Topic
I have to ask where you were in Oregon, most Fred Meyer stores are large standard box stores with 2 or 3 doors. Some do have 1980s brown brushed metal roof accents, which might be what you’re describing? I think almost all do have modern skylights (like WM) that brighten interiors.
About to start a thread about something I noticed at Fred Meyer and Target, perhaps we can chat over there to be more “on topic.”
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by BatteryMill »

So wow... I guess this is the first time Target's closed small-format stores. Didn't think this would happen for quite a while.
Alpha8472 wrote: March 31st, 2021, 6:53 pm Target said that the stores were closing due to not meeting sales goals. Even with the pandemic, most people do not want to pick up in the store when you can get free shipping directly to your house.
Have these stores been underperforming since before or after the onset of pandemic restrictions?
pseudo3d wrote: March 31st, 2021, 4:20 am I think they really blew it with trying to rebrand CityTarget, et. al. as just Target, because the brand, once known for consistent stores (usually around 100k square feet, give or take 20k) is now pushing out these tiny stores and stores that are less-tiny (a 70k-ish one squeezed into a former supermarket, for example, in Houston).

The major supermarkets (which have well under 100k square feet as an average size) almost never build tiny stores like that with the same name, most of the "tiny stores" that supermarkets have (and until relatively recently, JCPenney as well) are all legacy stores from prior to 1960.
I recall the reason for the change was, upfront, that "they're all Target". I'll admit that the larger stores can remain under the main Target brand given that they fit neither the "Express" or "City" marquees most of the time. Though overall, I'm not a fan of this change as it can fool some guests and that it diminishes consistency within the chain.

I do know a key reason for this was omnichannel, which tries to bring larger products through their order pickup systems. That could have been advertised more than what I quoted above, at least.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by Alpha8472 »

They reviewed the past performance and the anticipated future sales and decided to close the stores. The nearby Stonestown Galleria Target is expanding to triple its size due to the closure of Nordstrom.

These small Target stores did not do much business during the pandemic. They were so small that they always ran out of merchandise. The hoarding totally wiped out the small stores and made them useless. You had better luck going to a full sized Target to find what you needed in bigger quantities.

These tiny Target stores might have worked well when there was no pandemic and people needed a few convenience items. Now these little stores are getting very little foot traffic. People want to minimize trips and stock up all at once.
Last edited by Alpha8472 on April 5th, 2021, 3:47 pm, edited 1 time in total.
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Re: Target Closing 2 Small Stores in the San Francisco Bay Area

Post by storewanderer »

These small stores also strain the logistics network. When the logistics network is stretched to the max, you don't want to waste your time delivering a few units of product to a small store. You need to deliver pallets to a larger store and move on to deliver more pallets to more larger stores. Add to it ongoing wage and operating cost increases, specifically in these large cities where these stores operate, which adds additional costs to operating what are already low volume operations, and it only makes matters worse as far as the finances go.

The same reasons why small format failed for Wal Mart may very well be what causes it to fail for Target as well... these two closures are either one offs or they are the start of additional closures. Only time will tell.
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