THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, July 28, 1996 TAG: 9607270344
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: 81 lines
On Target's opening day, David Cicio marched into the new discount store with a mission: to find a low price on a can of fabric stain repellant. He emerged satisfied, toting a plastic bag and saying he'd probably be back.
``If the price comparison is the same, it will certainly be worthwhile,'' the Chesapeake resident said Wednesday.
That's what Target Stores desires as it storms into new territories along the East Coast. It will try to woo shoppers away from Wal-Mart Stores Inc. and Kmart Corp., the area's market leaders, and try to distinguish itself from rivals.
In Hampton Roads, Target debuted its first stores Wednesday in Chesapeake's Greenbrier community and in Hampton along Saville Road. Grand opening ceremonies were to be held at the stores today.
Target isn't finished here. It will open an outlet in Norfolk's Janaf Shopping Center in October. Other stores will follow in Virginia Beach, Newport News and Williamsburg. From Virginia Beach to Williamsburg, Target hopes to have 10 outlets.
For retailers, especially mom-and-pop merchants, Target is a force to be reckoned with, retail analysts say. Since 1967, when Minneapolis-based Dayton Hudson Corp. opened its first Target store, the division has expanded to more than 700 outlets. At the same time, sales have grown to about $15.8 billion.
Like Wal-Mart, Target has deep pockets and buying power, meaning it purchases so much from manufacturers that it can demand special discounts. Smaller retailers often cannot compete with the big discounter's prices.
Cicio realized that later. Before he walked into Target, he had paid about $10 for a stain-repellant product at an automotive store. At Target, he got the same item for $5.99.
Upset, he returned to the auto retailer, where the man behind the counter told him his store couldn't compete with the big discounter's prices.
``He was very gracious in his explanation,'' Cicio said
Small retailers won't be the only ones feeling Target's presence. With limited shopping dollars available, some retail analysts see the area's market as a battleground for Target and Wal-Mart, with regional discount chains like Hills Stores and Rose's taking the hits.
``Target can do well where Wal-Mart does well,'' said Wayne Hood, an analyst with Prudential Securities Research in Atlanta. ``They can survive. Typically, it's the third-, fourth- or fifth-tier retailer that will struggle.''
While their markets increasingly overlap, Target and Wal-Mart aren't exactly direct competitors.
Wal-Mart is the place where shoppers expect to find low prices on almost anything from toothpaste to a shotgun, retail analysts say. Shoppers looking for hardware, hunting or automotive products probably will have better luck at Wal-Mart.
Target says it is competitive on pricing for everyday discount items. But it likes to think of itself as the mass merchandiser with a penchant for the finer things in discounting. It says it concentrates on more fashionable apparel and more upscale soft goods - areas where prices might be higher.
That focus has earned Target the nickname, ``Tar-zhay.''
``We're focused more on trend merchandising,'' said Tom Sands, senior vice president for Target's eastern region. ``You'll see that in the signage, the display, the apparel. . . . So it will feel more like a department store than a discount store.''
At Chesapeake's Target location, customers will find wide aisles, uncluttered by promotional displays that often irritate shoppers trying to navigate their way through stores. ILLUSTRATION: Color Photos by Martin Smith-Rodden/The
Virginian-Pilot
A worker waks through the "yellow world" area of the Chesapeake
Target store.
Employees stretch during the morning huddle at the new Target store
in Chesapeake.
[color shot of the exterior of the Target Store]
KEYWORDS: TARGET DEPARTMENT STORES TQM TOTAL QUALITY
MANAGEMENT by CNB