Target’s miss catastrophic

Hey there, time traveller!
This article was published 16/01/2015 (3943 days ago), so information in it may no longer be current.

To appreciate the full scale of Target’s failure in the Great White North, the Minneapolis retailer didn’t last as long in Canada as the most disastrous incursion onto Canadian soil in U.S. history, the War of 1812.

In 2011, Target announced a $1.8-billion deal to take over hundreds of Zellers stores as part of an ambitious plan to expand its footprint into Canada.

Target opened the first of 133 Target Canada stores in 2013. Less than two years later, all of them are closing, creating a nationwide mess that’s bound to include the shotgun-wedding transfer of some buildings to other retailers, empty real estate at other locations and no less than 17,600 layoffs.

Those job losses, of course, came on top of all the Zellers employees laid off when Target entered Canada. The retreat is catastrophic.

While the scope of the retailer’s swan dive is national, Winnipeg has been hit unusually hard, and not just because this city has four Targets — at Polo Park, Grant Park, Kildonan Place and Southdale.

For starters, the Winnipeg casualties include the closure of the only major grocer on the west side of downtown — the former Zellers in the basement of the Bay, a retailer purported to outperform suburban Zellers in sales, largely on the basis of its grocery aisles.

The closure of the downtown Zellers, which obviously didn’t fit into Target’s suburban plans, spawned a downtown-grocery debate led by Portage Place-area apartment residents, who remain without a full-service, pedestrian-accessible grocer.

The notion of spending public dollars on a private grocer remains on the municipal table, much to the chagrin of corporate-subsidy opponents.

More seriously, the Target Canada failure has created a gigantic hole at the former Canad Inns Stadium site, where a massive, two-storey Target opened mere months ago on land owned by a joint venture between Shindico Realty and Polo Park mall owner Cadillac Fairview.

Finding a new tenant for such a large big-box store may not prove a long-term problem for Shindico, a demonstrably resourceful company. But it does shine a spotlight on the city’s 2012 decision to award the stadium site to Cadillac Fairview and Shindico.

The city’s original expression-of-interest document for the site — handed to the winning proponent a few days early, according to the 2014 city real-estate audit — called for some form of residential development of the site. Adding actual residents to Polo Park would have done wonders for the neighbourhood, both in terms of increasing pedestrian activity in the notoriously automobile-centric area and alleviating congestion.

Instead, the city agreed to sell the former stadium site for $30.25 million to Cadillac Fairview and Shindico, which proceeded to place a big-box retail anchor — Target — at the site.

This appears short-sighted, given that low-density big-box retail developments are antithetical to the city’s stated planning goals, which call for increased density and more mixed-use development. Banking on big-box retail is also dangerous, given how many such stores have closed across North America, creating vacant eyesores.

Even worse, city and provincial property taxes from the former stadium site are supposed to help pay back part of the province’s $191-million contribution toward the $210-million construction of the city’s new football stadium, Investors Group Field. Cadillac Fairview and Shindico will keep paying property taxes, but an empty Target on the site will generate less tax revenue than a thriving business would.

Also complicating matters is $40 million worth of city-provincial spending to improve traffic infrastructure in the Polo Park area, centred around the former stadium site. While this won’t go to waste in the long term — an outlet mall is planned for the coming years — it’s worthwhile questioning whether this outlay of cash should have been a short-term municipal infrastructure-funding priority.

Winnipeg’s new mayor, Brian Bowman, campaigned on a promise of a better-planned city.

The spectacular failure of Target Canada should serve as a warning about the wisdom of approving future big-box developments, even those accompanied by U.S. branding hype.

It is well past time for Winnipeg to consider toughening up its planning regime to demand more from commercial developers. The last thing we need, esthetically and from a planning perspective, are more enormous big-box stores surrounded by sprawling parking lots.

bartley.kives@freepress.mb.ca

Why do you think a store that was so popular with Canadians south of the border failed when it set up shop north of the 49th parallel? Join the conversation in the comments below.