Target corporation is the second- largest discount store retailer in the U.S after Walmart. It was founded in 1902 and has been showing steady growth across the U.S until few years ago. Due to many competitors and the uncontrollable factors, like U.S economic situation, Target has permanently closed five stores last year and 13 more the year before that. In 2018, Target has a plan to close 12 stores.
Scheduled for closure
- Minneapolis' Twin Cities metro area (Hastings)
- Fergus Falls in Minnesota
- Harper Woods, Michigan
- Hutchinson, Kansas
- Benton Harbor, Michigan
- Macon, Georgia
- Slidell, Louisiana
- Lauderhill, Florida
- Matteson, Illinois
- Romeoville, Illinois
- Baltimore (West)
- San Antonio (Far East)
Why are these locations closing? Who is their
biggest threat?
It is neither Walmart nor Costco; they are dollar store chains, like Family Dollar and Dollar General. These dollar store chains provide way cheaper products. compared to Target. Target is in the middle of low quality/low price and high quality/high price.
Discount sector competition is strong, and these retailers must maintain
their competitiveness using creative methods and strategies. Customers'
disposable income and finances significantly influence sales, and general
economy's overall health often correlates closely with retail
sales and profitability for discount retailers like Target. Future growth
for these companies depends on their ability to thrive under these competitive
conditions.
While Target is shuttering some stores, it will continue with plans to
remodel 1,000 of its 1,800 stores by 2020. The renovations will cost about $7 million per store. Since these renovation costs are very high, Target needs to be extra certain about this investment and have to be ready for any possible negative outcomes.
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