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Why Canadians are paying more at Target Add to ...

We’re going to be profitable by the fourth quarter of this year—less than a year after we opened the stores. That’s incredible.

And you also have stores that area round 100,000 square feet versus 135,000.
Our average store is about 18% smaller than in the U.S.

So that helps in terms of productivity?
It helps in productivity, but the best way of driving profit is through revenue and through growing profitable sales.

What about Target’s urban strategy?
We’d love to have a store in Toronto. We’d love to have one. I mean, our city Target strategy—we’re in the urban areas of L.A., San Francisco, Seattle, Chicago, these are locations that were unheard of in big-box retail, which is why it’s a smaller format for us. But we have a couple of stores now on the south side of Manhattan, and we have one in downtown Minneapolis, which is a great store for us, and it’s right next door to our headquarters. So we love urban stores. It’s just that the real estate is such a challenge. And it costs a lot of money to manage those stores,because the logistics are a big challenge. We do very well in 130,000-square-foot buildings with one door. But with a two-storey octagon with four entrances, like at Square One, you have to staff the entrances, you need checkouts at the entrances, which is more labour investment. There are conveyors for the stockrooms and multilevel stockrooms and issues around how trucks can get in and out of there.

Tell me about e-commerce. Is it going to launch in 2013?
We will not have e-commerce on day one, but we’re going to be deeply invested in online presence. You know, we already have a very big presence on Facebook, we have a big presence on YouTube, we have a big presence on Twitter, so it’s one of the best tools we can use to focus on guest engagement. Probably after this interview we’ll get 370,000 Facebook [24] fans—which, if you compare that to the rest of the industry, is pretty amazing. And we haven’t opened up one store yet [25].

Footnotes:

  1. Target-branded debit or credit cards that give customers a 5% discount
  2. Fisher is not Canadian; he grew up in St. Paul, Minnesota, not far from Target's first store in Roseville, opened in 1962
  3. Including cookware by Giada De Laurentiis, bed, bath and decor from Oprah fave Nate Berkus, cosmetics from makeup artist Sonia Kashuk and a limited run of clothes from Hollywood stylist Kate Young
  4. Minimum wage is $7.25 in the U.S. and $10.10 in Canada
  5. Prabal Gurung
  6. For one, it means not being unionized - Target has fought off efforts to organize employees and won a labour board battle with Zellers' union last year
  7. Brand recognition among Canadians is at 92% today compared to 70% in 2011
  8. Fisher took three years of French in high school and also completed an executive French course after moving to Canada
  9. Walmart didn't fail so much as falter when, in 1994, they distributed flyers in Quebec in English only, running afoul of both provincial language laws and French residents
  10. 1.2 metres a year, on average
  11. It's 435 kilometres north of Edmonton
  12. Fisher was a sixth-round draft pick in 1996 - the same year the Rangers drafter pitcher R.A. Dickey in the first round
  13. White, the Olympic gold medal snowboarder, has a line of clothing for Target
  14. Target assigns each customer, according to The New York Times, a "Guest ID" to track every item they buy and every coupon they redeem, and uses that to predict, say, when a woman is pregnant - as early as the first trimester - in order to send relevant offers her way and turn her into a habitual Target shopper
  15. Median age: 40; median household income: $84,000; 43% have kids, 57% have a college degree
  16. According to Heinz, different nations have different ketchup palates. Here in Canada - and Britain, Australia and Venezuela - we like our ketchup sweeter. In the U.S. and continental Europe, ketchup "users" - Heinz's wording - like it a little spicier
  17. Target has hired 5,700 so far, and will employ 27,000 by year's end
  18. Buying only Zellers' store leases, not the whole company, allowed Target to lay off 27,000 Zellers workers. When Walmart took over Woolco in 1994, it hired on 16,000 employees at 122 locations
  19. A gondola
  20. Total cost: $1.8-billion
  21. Target's overall sales last year were $72-billion
  22. Total profit: $3-billion (2012)
  23. 21 million people a year
  24. 863,000 fans on Facebook and 41,000 followers on Twitter (as of early March)
  25. Target opened three stores in Ontario on March 5, another 17 on March 19, with an additional 4 stores scheduled to open on March 28
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Follow on Twitter: @MarinaStrauss

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