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Real Estate Trends, Retail Real Estate, Twin Cities Real Estate

Target to Test Small Format “Express” Store Concept

A New York Times article yesterday broke the news that Target has signed a lease for its smallest store ever. The 20,000 sf retail space is in an under-construction mixed-use development in the Dinkytown neighboorhood of Minneapolis. This summer, Target will roll out its first “Target Express” store at the site. At about a tenth the size of a typical Super Target, the Target Express will be the first of kind, and will feature a mix of grocery, pharmacy, and basic home goods.

TargetExpress

 

The experiment with smaller stores is part of an effort by Target to have a bigger presence in urban areas. According to John Griffith, Target’s vice president of property development, Target wants to remain convenient as more people decide to live in cities rather than suburbs. Mr. Griffith pointed out that many shoppers “grew up with a Target experience. Now, they show up at their cool little bungalow they’re redoing, they’re close to downtown, and yet Target is a little bit of an effort to get to.”

The location was chosen in part to capture on the surround University of Minnesota student market. However, Target also wanted something close to theird downtown Minneapolis headquarters, which will allow the company to easily monitor and experiment with the new concept prior to rolling out additional locations.

Target is somewhat late to the game in introducing a smaller urban format store concept. Major competitor Wal-Mart opened is first small-format “Wal-Mart Express” in 2011. It has since opened a handful of smaller-format stores that experiment with a variety of sizes, ranging from 40,000 sf “neighborhood markets” to a 3,700 sf location near the University of Missouri. Until now, Target’s smallest format has been CityTarget, stores that range from about 80,000 to 125,000 square feet.

Commercial Real Estate, Development, Economics, Real Estate Trends, Retail Real Estate, Twin Cities Real Estate, Urban Planning

Wal-Mart, Target Roll Out Smaller Urban Store Formats to Do Battle with Dollar, Drug Store Rivals

“Big Box” Discount Retailers Downsize Stores In Bid to Seize Market Share

Here is a recent article by Randyl Drummer posted by the CoStar Group. It shows how Target along with Walmart is adapting to opening smaller locations in urban areas

The latest growth strategy at Wal-Mart stores is to get bigger by getting smaller. After building the world’s largest retail platform by opening superstores in every major U.S. market, Wal-Mart is doubling down on a strategy of opening new stores that are a fraction of the chain’s traditional size, targeting densly populated urban areas where demographics increasingly show more people prefer to work and live.

The Bentonville, AR-based retailer is aggressively expanding its Neighborhood Market stores, which average 38,000 to 40,000 square feet — a fraction the size of Wal-Mart’s traditional 180,000-square-foot “Supercenters.”

Bill Simons, president and CEO of Wal-Mart, said the company plans to open more than 200 more Neighborhood Market stores in the U.S. over the next 18 months, bringing the total to more than 500.

“We continue to roll out this format aggressively throughout the country, opening more sites in the second quarter than in any other quarter in our history,” Simon said. “In fact, we opened 12 stores in just one day this (past) quarter.”

Moreover, the retailer has signaled it may green light an even smaller format called Walmart Express, with stores that range in size from 10,000 square feet to 12,000 square feet. Wal-Mart has built 20 Express stores in a pilot phase that has “performed very, very well for us,” Simon said, adding that the retailers plans to share more details about its plans for the smaller format at its Oct. 15 meeting for the investment community.

Both concepts compete directly against a rising number of grocery stores, drug stores and dollar discount stores that have added groceries to their offerings to reach shoppers looking for value and convenience.

The giant retailer’s smaller formats are part of a multichannel strategy to stock products purchased at its bricks-and-mortar stores as well as quickly deliver products ordered online.

In part to support that rapid product delivery strategy, Wal-Mart this week announced plans to open two new online fulfillment centers, an 800,000-square-foot facility in Fort Worth, TX, and a 1 million-square-foot center scheduled to open in early 2014 in Bethlehem, PA, that will be its largest ever.

“Increasingly, access is becoming more important to customers. And we believe we have an opportunity today through multiple formats to take our brand closer to the customers,” Simon told investors at the recent Goldman Sachs Global Retail Conference.

Express stores sized as high as 15,000 square feet have tested and delivered very well against competing formats, offering shoppers groceries, pharmacy items and fuel at competitive prices against dollar store, drug store and grocery rivals, he said.

While not a new concept – Wal-Mart has been opening typical grocery store sized markets since 1998 – Neighborhood Markets is now one of the fastest-growing formats in retail, with 60% growth and mid-single-digit comparable sales over the last couple of years, Simon said.

Target: Also Testing Smaller Format, But Proceeding Cautiously
Fellow discount retailer Target has been more deliberate in the national rollout of its smaller-format CityTarget stores. Although only two have opened so far in 2013, for a total of seven, the company sees immense promise in the new smaller format.

Read the entire article: http://www.costar.com/News/Article/Wal-Mart-Target-Roll-Out-Smaller-Urban-Store-Formats-to-Do-Battle-with-Dollar-Drug-Store-Rivals/152876?ref=100&iid=357&cid=FC4C5ECBFF14BCA42CFC3FCF0353A739

Retail Real Estate

Target Expands to Western Canada

Local retailer Target expands their reach from Ontario to western Canada.

Photo Credit: Smart Canucks

Photo Credit: Smart Canucks

Target announced this week 22 new stores will open in British Columbia, Alberta, and Manitoba on May 7 as well as 2 more stores on May 14. As previously announced, Target plans to open 124 stores across Canada throughout 2013.

In a May 6 press release, Tony Fisher, president of Target Canada, remarked “Target is thrilled to be opening stores in Western Canada, providing a one-stop shopping destination that meets the wants and needs of our guests. It was exciting to see the response to our Ontario store openings, which have produced valuable insights that along with our soft openings in Western Canada will help us to continue to deliver on Target’s Expect More. Pay Less. brand promise for guests across Canada.”

In addition to exclusive Target brands such as Circo, Archer Farms, Market Pantry and up & up; Target Canada will feature limited time collaborations with Roots and Sam & Libby footwear. Target plans to feature on-going collaborations as well.

Commercial Real Estate, Development, Executive Insight Series, Industry News, International Real Estate, Retail Real Estate, Uncategorized

David Marquis shares Target’s Expansion Plan

speaker_DavidMarquis

David Marquis, Director of Corporate Real Estate for Target Corporation, recently spoke at UST's Real Estate Executive Insight Series

“Life’s a moving target” for David Marquis, Director of Corporate Real Estate for Target Corporation.  After graduating from the University of Minnesota with a degree in architecture, Marquis joined Target as a CAD store planner, and eventually moved into Target’s real estate group.  His current responsibility is managing the non-retail portfolio including office and distribution space.

Target’s Canada expansion strategy, which commenced when Target acquired the leasehold interests for Zellers retail locations throughout Canada, includes launching approximately 130 new stores in 2013.  The existing Zellers stores will be renovated; Target negotiated with the landlord in each case to allow the store to go dark during the renovation.  Target will be hiring 35,000 new team members for its Canadian expansion.  Both logistics and brand translation are important issues, namely, how to re-create the Target shopping experience with Canadian employees who have never shopped at a Target store.

As for US stores, Target is focused on two major initiatives: City Target and renovating existing stores.  While a traditional store is 130,000 square feet, new City Target stores springing up in popular urban locations throughout the US will be sized at 60,000-100,000 square feet .  This year Target broke ground on a historic rehab project in Chicago and will complete City Target stores in Seattle, Los Angeles, and San Francisco next year.  The investment in existing Target locations will add fresh grocery departments to stores, improving Target’s convenience factor as a “one-stop shop.”

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Executive Insight Series

David Marquis, Director of Corporate Real Estate for Target, to Speak at UST on October 18th

Corporations view real estate from a unique perspective. Learn how Target has handled their retail and corporate real estate from David Marquis, Director of Corporate Real Estate for Target Corporation.

targetDavid Marquis leads a real estate team responsible for delivering retail and non-retail facilities to support Target’s growth. Marquis joined Target’s real estate department as a development manager in 1992. He was promoted to real estate manager in 1995 and regional real estate manager in 1998. He has held his current position since 1999.  Marquis serves on the Board of Directors for BOMA. He also serves on the Transportation and Transit subcommittee for the Minneapolis Downtown 2025 Plan and is a member of International Council of Shopping Centers and CoreNet. Marquis graduated with a Bachelor of Architecture degree from the University of Minnesota.

UST’s Executive Insight Series events are free and the public is welcome but please register here.  Also, don’t forget to register for the 2011 Real Estate Hall of Fame Induction Ceremony.  The registration deadline is October 14th.