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San Clemente Journal

San Clemente Business - Ready for Target?

May 01, 2010 09:59PM ● Published by Don Kindred

by Bill Thomas

On May 18, 2010, the San Clemente City Council approved not only the future sports park, but a Target retail store across the street at the northwest corner of Avenida La Pata and Avenida Vista Hermosa. The Target Corporation is anticipating winter 2011 for the grand opening date.

Why Target? 
If one adds up all its positives, it’s a reasonably good choice. It’s preferred by a large sample of San Clemente’s citizenry? It has a long and successful history. Its first store was opened over 100 years ago, under a different name. Now, there are Targets in 49 of the 50 states. It’s “user friendly.” Stores are large and attractive. There’s a wide variety of reasonably priced merchandise. Customers enjoy shopping and buying in the stores. Its continued growth throughout the country validates its popularity. “Good deals” prevail. It’s a philanthropic organization. It’s environmentally responsible as to “Greening,” recycling waste materials, and utilizing unharmful building materials (See LEEDS sidebar regarding energy-efficient technologies).

Former City Mayor Lori Donchak reported, “Not only will this new store be convenient for us, but it will also offer an environmental benefit. Less road trips in the car mean less greenhouse gas emissions released into our environment.”

When the available building site went on the market, there were 41 offers of purchase for either residential or commercial purposes. Target was the only commercial bidder. Associate City Planner, Amber Gregg, said that the results of a May 2008 citizen phone survey by Redhill Research Group indicated 63% local respondents preferred a Target store over a residential development, 23% supported more residential development on the site, and 16% had no preference for the land use.”

San Clemente’s City Manager, George Scarborough, predicted, “The City Council’s unanimous vote for the Target store in San Clemente has been praised by the community and comes at an opportune time, considering the ongoing economic slump, which has impacted the City’s financial condition. Target has a solid track record of building sustainable buildings and being a good corporate citizen as well as embracing philanthropy; giving back to the communities it serves. I am confident we will have a first-rate Target store that reflects the character of San Clemente and serves the needs of our residents for years to come”

According to specifications, this will be a 142,206 square foot retail store with 513 on-site parking spaces. It will be built on 14.79 acres of current vacant undeveloped land, which was “rough-graded” in 2002. Target’s purchase price of $13.8 million will help in financing the neighboring park.

Target was founded in 1902 as the Dayton Dry Goods Company in Minneapolis, Minnesota. Later, the first Target store opened in 1962, as a division of the Dayton Hudson Corporation. By 1970, the company had expanded into Missouri, Wisconsin, Texas and Oklahoma. By 1982, with the acquisition of former FedMart stores, Target moved into the West Coast. In 1987, it also added former Gemco stores. By 1990, Target had opened units in the Southwestern U.S., in Florida, Georgia, and North and South Carolina. The entire corporation of several divisions changed its name to Target Corporation in 2000. By 2006, Target expanded to 1488 units, with sales of $59.4 billion. As of May 1010, only one of 50 states, Vermont, did not have a Target store. Now, as America’s second largest discount retailer behind Walmart, Target is ranked 28th on the Fortune 500 list (2009) and is a component of Standard & Poors 500 index. Its rate of growth is 70 new stores per year.

As a large chain of discount department stores, usually sized at 95,000 to 135,000 square feet, Targets carry clothing, shoes, jewelry, health and beauty products, electronics, entertainment items, bedding, kitchen supplies, sporting goods, toys, pet supplies, automotive and hardware supplies. The stores also sell seasonal merchandise such as patio furniture during the summer; it sells seasonal decorations and more gift cards than any other retailer in the country.

When entering any Target store, one sees large, tastefully placed, overhead blue or red signs identifying products. Many stores have photo processing, optical supplies, and, often, a Starbucks Coffee or a Pizza Hut Express as part of the regular food services.

Though the “big-box” store layout in suburbs is quite common, the company has been flexible with its store designs. In urban areas where a standard one-story building is not feasible, Targets are multi-storied, encompassing sales floors, offices, and storage areas. Such stores are located in many city centers, including Annapolis, The Bronx, Brooklyn, Glendale, Los Angeles, Chicago, and Miami are examples. Target also operates 38 distribution centers across the United States, shipping regularly to its stores. The Rialto, California, center is the closest one to San Clemente. Four facilities in the United States, near sea ports, receive shipments from overseas manufacturers and suppliers, including Rialto.

The Target Corporation strives to differentiate from competitors by offering more upscale, trend-forward merchandise at low cost. The stores also emphasize, with a variety of signs, their “discount philosophy.” When browsing through a Target recently, I saw the following reminders: “You’re Shopping List For Less,” “Amazing Deals,” “Pretty Presents. Practical Prices,” “Clean Air. Breathe Easy Prices,” “Home of the Save,” “Our Low Price Promise,” “Temporary Price Cut,” “We’ll Match the Price …,” “Expect More. Pay Less,” “Our Faves & Raves,” and “Eat Well. Pay Less.”

According to the Internet’s Wikipedia, Target stores tend to attract younger, affluent customers. The median shopper is 41 years old, household annual income is $63,000, 76% of customers are female, and more than 45% have children.

Entering customers to an attractive Target store first pass computers to use in locating desired products, ATM machines, Customer Services, cashier’s booths, and a Happy Bargains Section with “$1 & Up” section with such items as batteries, hats, cups, toys, bottles, and socks. Aisles are wide, lighting is good and special express cashier stands speed purchasing. The presentation of products is not cluttered but well-spaced. Everything, including rest rooms, is neat and clean. Music is not played in the stores. At strategic locations, scanners are available for price-checking next to a phone in case assistance is needed.

Employees wear red shirts or vests with name tags. A practice borrowed from the Disney Company is the reference to customers as “Guests,” employees as “Team Members,” and supervisors as “Team Leaders.” Managers are called “Executive Team Leads” (ETL), and the Store Manager is known as “Store Team Leader” (STL). Traditionally Target emphasizes diversity in its hiring of employees and selection of venders and contractors. When asked why they shop at Target, customers reply, “I love the reasonable prices;” “They have everything I need in one place;” “It’s clean, friendly and convenient.”

Stacey Tayrien, a San Clemente resident, said, “I can’t wait for the Target to come to San Clemente because I love Target, I would rather spend my money here in San Clemente versus driving up to Aliso Viejo. I like it that Target gives back 5% to Education to our designated choice of school. They have a great brand, fashion-forward merchandise, clean stores and they will employ additional San Clemente residents. Most importantly I want to keep the money here. Live here, spend here.” Since San Clemente’s new Target store will be directly across from the forthcoming sports park, Mayor Jim Dahl sent a letter suggesting that the company explore naming rights, currently listed at over one million dollars. While this consideration is under review, the City’s Beaches, Parks & Recreation Commission is in the process of soliciting suggestions for potential park names from the citizenry. A final recommendation will be presented to the City Council.

Philanthropically, the Target Corporation is recognized as one of the most “giving” companies in the U.S., ranking 11th in Fortune Magazine’s “Top Most Admired Companies” in 2007 for its overall donation endeavors. Contributions include five percent of its pre-tax operating profit; Target gives over $3 million a week to the communities in which it operates. It also has contributed over $150 million to U.S. schools designated by cardholders from its Target Visa program. It has been a sponsor for NASCAR and Indy Car racing teams as well as various museum projects, and such entertainment awards programs as the Oscars, Emmys, and Golden Globes. Further evidence of the company’s philanthropy is its work with low cost housing projects, Salvation Army chapters, health, and disaster relief.

Target Stores, headquartered in Minneapolis, also operates five supporting subsidiary companies: Target Financial Services (TFS), which issues and manages Target’s credit cards; Target Sourcing Services/The Associated merchandising Corporation (TSS/AMC), the importing arm of the company, securing garments, furniture, bedding and towels from all over the world; Target Commercial Interiors, which provides design services and furniture for business customers; Target Brands, which owns the company’s private label products, such as grocery and electronic brands; and Target.com, founded in 2000, which oversees the company’s e-commerce activity and is separate from the retailing division. “The Target store represents a positive community economic impact. Target will increase the City’s sales tax base by as much as $300,000 annually; enhance retail options for residents; and, provide jobs to our community. Sales tax represents the City’s second largest revenue source for the General Fund which funds many of the essential services we provide to our residents,” said Pall Gudgeirsson, Assistant City Manager/Treasurer of the City of San Clemente. “The sale of the City’s vacant lot to this premier retail establishment will not only accomplish all these things, but also provide for much needed cash to complete the long-awaited sports park and aquatic center project. This will be a win-win project once the sale closes and the City receives the cash to move forward.”

Company representative, Jenna Reck, reported, “Target currently operates 1,740 stores in 49 states. Historically, Target has considered hundreds of sites each year for potential new store locations. In the current environment, we are being more selective to ensure we make the best use of our capital from a long-term investment perspective. We identify potential new store opportunities in trade areas that are underserved or have the potential for new population growth. We analyze extensive data on existing store performance, demographics, competition and market potential to identify trade areas which would be well-served by additional Target store locations. Target works closely with local officials to develop stores that complement and support a community’s needs. To learn more about Target’s impact on local communities, visit the Community Outreach page on our pressroom website.” b

 

Specific plans for the new San Clemente Target store, including renderings and view simulations for the approved design, can be found on the City’s website. For additional information, visit the Community Development Department or contact Amber Gregg (949) 361-6196 or gregga@san-clemente.org.

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