St. Albert loses Target
'Let us wallow in our sorrow'
Saturday, Jan 17, 2015 06:00 am
The mood was sombre amongst the group of Target employees huddled together outside the St. Albert store on Thursday morning.
Hours earlier, the company announced that Target is pulling out of Canada, closing all of its 133 locations at once. With that comes job losses for over 17,500 employees across the country - about 150 to 200 people per store, based on previous information from store executives.
St. Albert employees, visibly upset, did not want to comment.
“Let us wallow in our sorrow,” one said.
Target’s announcement came as a surprise to everybody, including the landlords, said Jillian Creech, general manager of St. Albert Centre.
She could not comment on what the mall plans to do with the empty space once Target moves out. But she stressed that the mall will work quickly to regain control of the space “to reduce the downtime and create new job opportunities for the people of St. Albert.”
“Their decision to close will impact a significant number of employees which is truly unfortunate and honestly that’s where our concern and focus is,” she said.
Target launched in Canada almost two years ago, in March 2013. Failing to deliver to consumer expectations from the start and following two years of continued financial losses, the company released an announcement Thursday morning.
Target lost almost $1 billion in its first year in Canada, it said. While the losses have been fewer since, the chain saw no “realistic scenario that would get Target Canada to profitability until at least 2021,” said Brian Cornell, CEO of the U.S. parent company.
The company is now beginning its liquidation process. Stores are expected to start closing soon.
Shoppers at the St. Albert store on Thursday morning were divided about the closure. Some said they wouldn’t have “wept had it closed its doors this morning.” Others said they will miss the store.
“I liked their home stuff and the school supplies come at a good price,” said Rebecca Black, a student.
One shopper said she only came to Target twice, both times buying old flower sack tea towels, a product otherwise not available in the city. She felt very sorry for the people losing their jobs but didn’t care much for the store.
Another woman, Ashley Kenny, said she would miss Target because they have a good selection of baby products. It was easy to shop there because the store is always empty. But “that’s also the reason it closes now,” she said.
When Target entered the Canadian market it was met with high expectations, fuelled by cross-border shoppers who marvelled about the American stores, their wide product selection and lower prices.
The retailer was celebrated until the first customers left disappointed the day Canadian stores opened. As things continued to go downhill – shelves were continuously out of stock, product selection limited and customers absent – the store tried to turn things around. It was to no avail.
“Had they been able to deliver the U.S. experience in terms of products and prices in Canada, I think they would have been a formidable competitor,” said Kyle Murray, director of the School of Retailing at the University of Alberta.
“I think they just really misunderstood the Canadian market and the Canadian consumer.”
Had Target opened only one or two stores at the start – similar to competitor Walmart – perhaps they could have fixed their mistakes, he added.
The big question now is what happens to the real estate Target leaves behind.
Some stores will sell quickly, such as locations in West Edmonton Mall. But smaller malls, such as St. Albert Centre, may be more challenged filling the space, he said.
“It’s quite possible that some of those spaces will stay empty for now,” he said.
The owner of the privately-owned pharmacy located within Target said she was not yet able to comment on the future of her business.