Walmart, Canadian Tire in Target's crosshairs
Jumat, 08 Juli 2011 by Android Blackberry
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| Canadian Tire in Target's crosshairs |
Walmart, Canadian Tire in Target's crosshairsWalmart Canada Corp. has the most to lose when Target Corp. begins opening shops in Canada, based on the most recent investigation on consumer loyalty.
But Canadian Tire Corp. may face a serious threat too due to its stores’ proximity to current Zellers locations and its overlap with Target in key household categories, says Mark Satov, founder of the Toronto consulting firm Satov Consultants, which conducted the study.
Researchers asked people who identified themselves as frequent customers at chain stores - which includes Walmart, Canadian Tire, Sears as well as the Bay - which retailers they would be much less most likely to shop at when Target arrives.
The Arkansas-based big-box chain topped the list, with 57% of clients saying they would be much less most likely to shop at Walmart. Sears Canada was subsequent with 44%, followed by the Bay at 37%.
Canadian Tire was cited by only 19% of those surveyed, but Mr. Satov said its proximity to Zellers locations that may possibly become Target outlets and its product mix mean Canadian Tire is most likely facing a serious threat.
Six weeks ago, Target announced the very first 105 proposed store leases that it was acquiring from Zellers.
Earlier this year it paid $1.8-billion to Zellers owner Richard Baker for as much as 220 leasehold interests of Zellers locations. Two weeks ago, Walmart signed a deal to acquire leases at as much as 39 web-sites now operated by Zellers from Target Canada.
“Walmart [faces] the biggest risk,” he said. “You know you might want to shop there due to the fact they'll have it at the cheapest cost, but if there's one more alternative buyers could possibly take it.”
That Target has managed to achieve such brand resonance in Canada two years before opening and without any mass communication efforts is really a remarkable feat, Mr. Satov said.
Mr. Satov stated it can be a clear sign that Canadians are primed to at least attempt the chain when it opens up to 150 shops in 2013. (Prior research by Toronto retail consultancy Kubas Primedia published in May bears that out, with 61% of customers across the country saying they would be “very” or “somewhat” considering shopping at Target shops when they open in Canada.)
But the potential market impact just isn't as clear-cut as a one-to-one consumer defection to Target from any specific retailer, based on Mr. Satov. It is a question of how much of a possible bite Target will take from powerful Canadian banners.
“You do not lose shoppers, you lose trips,” he explained. “If your average non-food Walmart shopper shops there 12 times a year, 57% of those people would see some of those trips shift to Target. Having a food shopper, [Walmart] becomes a component of their routine and [store visits] could range from 26 to 52 trips a year. The question is, how several [customer] trips will Walmart lose?”
Target’s status as a prospective grocery player is uncertain in Canada and hinges, initially a minimum of, on leasing restrictions inside the malls where Zellers operates. Numerous of those malls are already anchored by another full grocery store, Mr. Satov noted.
A strong established base in food is an asset Canadian Tire doesn't have, nonetheless. “If I were Canadian Tire, I’d worry a entire lot a lot more than the information would indicate. They have gone additional into housewares, which is Target’s sweet spot, and the location overlap is rather high…. And if Target gives them an excellent experience I believe they ought to worry about losing female customers. Target has apparel and housewares, and Canadian Tire does make a great deal of funds on housewares and cleaning goods.”
Canadian Tire doesn't appear to be sitting by idly; the retailer just announced a vast expansion of its sporting goods category - 1 which Target carries only minimally - using the $770-million purchase of sporting goods chain Forzani Group Ltd.
As for Sears, the retailer caters to an older demographic and there's much less geographic overlap with potential Target web-sites than with Canadian Tire and Walmart, Mr. Satov stated.
While Walmart seems to have probably the most to lose, it is unlikely the retailer will suffer considerably unless it adjustments its core brand positioning, Mr. Satov stated. Whereas Target’s positioning is about providing stylish items for less than expected, Walmart is considerably much more focused on offering the lowest prices readily available on a lot of goods.
“The information can be a warning sign, but it’s not the whole answer,” he stated. For Walmart, Target and Canadian retailers who wish to remain at the forefront of consumers’ minds, “a lot of the game is understanding who you might be. I don’t think that if Walmart sticks to its guns its business is going to collapse in Canada.”
Satov Consultants’ study was conducted at the end of January and has a margin of error of plus or minus 4%
Walmart, Canadian Tire in Target's crosshairs
But Canadian Tire Corp. may face a serious threat too due to its stores’ proximity to current Zellers locations and its overlap with Target in key household categories, says Mark Satov, founder of the Toronto consulting firm Satov Consultants, which conducted the study.
Researchers asked people who identified themselves as frequent customers at chain stores - which includes Walmart, Canadian Tire, Sears as well as the Bay - which retailers they would be much less most likely to shop at when Target arrives.
The Arkansas-based big-box chain topped the list, with 57% of clients saying they would be much less most likely to shop at Walmart. Sears Canada was subsequent with 44%, followed by the Bay at 37%.
Canadian Tire was cited by only 19% of those surveyed, but Mr. Satov said its proximity to Zellers locations that may possibly become Target outlets and its product mix mean Canadian Tire is most likely facing a serious threat.
Six weeks ago, Target announced the very first 105 proposed store leases that it was acquiring from Zellers.
Earlier this year it paid $1.8-billion to Zellers owner Richard Baker for as much as 220 leasehold interests of Zellers locations. Two weeks ago, Walmart signed a deal to acquire leases at as much as 39 web-sites now operated by Zellers from Target Canada.
“Walmart [faces] the biggest risk,” he said. “You know you might want to shop there due to the fact they'll have it at the cheapest cost, but if there's one more alternative buyers could possibly take it.”
That Target has managed to achieve such brand resonance in Canada two years before opening and without any mass communication efforts is really a remarkable feat, Mr. Satov said.
Mr. Satov stated it can be a clear sign that Canadians are primed to at least attempt the chain when it opens up to 150 shops in 2013. (Prior research by Toronto retail consultancy Kubas Primedia published in May bears that out, with 61% of customers across the country saying they would be “very” or “somewhat” considering shopping at Target shops when they open in Canada.)
But the potential market impact just isn't as clear-cut as a one-to-one consumer defection to Target from any specific retailer, based on Mr. Satov. It is a question of how much of a possible bite Target will take from powerful Canadian banners.
“You do not lose shoppers, you lose trips,” he explained. “If your average non-food Walmart shopper shops there 12 times a year, 57% of those people would see some of those trips shift to Target. Having a food shopper, [Walmart] becomes a component of their routine and [store visits] could range from 26 to 52 trips a year. The question is, how several [customer] trips will Walmart lose?”
Target’s status as a prospective grocery player is uncertain in Canada and hinges, initially a minimum of, on leasing restrictions inside the malls where Zellers operates. Numerous of those malls are already anchored by another full grocery store, Mr. Satov noted.
A strong established base in food is an asset Canadian Tire doesn't have, nonetheless. “If I were Canadian Tire, I’d worry a entire lot a lot more than the information would indicate. They have gone additional into housewares, which is Target’s sweet spot, and the location overlap is rather high…. And if Target gives them an excellent experience I believe they ought to worry about losing female customers. Target has apparel and housewares, and Canadian Tire does make a great deal of funds on housewares and cleaning goods.”
Canadian Tire doesn't appear to be sitting by idly; the retailer just announced a vast expansion of its sporting goods category - 1 which Target carries only minimally - using the $770-million purchase of sporting goods chain Forzani Group Ltd.
As for Sears, the retailer caters to an older demographic and there's much less geographic overlap with potential Target web-sites than with Canadian Tire and Walmart, Mr. Satov stated.
While Walmart seems to have probably the most to lose, it is unlikely the retailer will suffer considerably unless it adjustments its core brand positioning, Mr. Satov stated. Whereas Target’s positioning is about providing stylish items for less than expected, Walmart is considerably much more focused on offering the lowest prices readily available on a lot of goods.
“The information can be a warning sign, but it’s not the whole answer,” he stated. For Walmart, Target and Canadian retailers who wish to remain at the forefront of consumers’ minds, “a lot of the game is understanding who you might be. I don’t think that if Walmart sticks to its guns its business is going to collapse in Canada.”
Satov Consultants’ study was conducted at the end of January and has a margin of error of plus or minus 4%
Walmart, Canadian Tire in Target's crosshairs
