Target to open small-format store near USC campusJuly 17, 2017
By Kevin Smith
San Gabriel Valley Tribune
In the world of retail, “small” is increasingly where it’s at.
A slew of companies, including Wal-Mart Stores In., Target, Lowe’s Companies Inc. and Best Buy Co. are looking to expand their footprint of smaller stores in response to consumers who no longer want to thread their way through massive mega stores.
A NEW AND SMALLER STORE AT USC
Target Corp., a company known for its affordable yet exclusive designer-label merchandise, began opening small-format stores in 2012 and the company will unveil one of its newest ones at USC Village on Sunday. The 22,000-square-foot store, at 3131 S. Hoover St. near Jefferson Boulevard, will be the Minneapolis-based retailer’s sixth smaller store in the Los Angeles area. It will employ about 70 workers and it will be considerably smaller than Target’s traditional stores, which average about 130,000 square feet.
The grand opening is set for 8 a.m. Sunday.
USC Village is a $700 million, mixed-use development on 15 acres that will house students and a variety of additional retail uses.
“We’re excited about this,” said Laurie Stone, an associate senior vice president for real estate and asset management at USC. “Target will be our first tenant in the Village and it will not only serve students on campus but also people in the surrounding community. We have a development agreement with the city of Los Angeles that this will also serve the community.”
The store will feature everything from clothing and electronics to groceries and cosmetics, as well as a variety of home goods with a focus on dorm and apartment living, and USC-branded merchandise. Shoppers will also have access to the company’s order pickup service, which allows them to order items from target.com and pick them up at their local Target store.
“We also have a Trader Joe’s that will be opening in August and Starbucks that’s also coming in,” Stone said. “More than 50 percent of the retail will be open by Aug. 17.”
Target will open another 21,000-square-foot, small-format store near U.C. Irvine on Wednesday and additional Southern California locations will be opening in Mission Hills, Orange and Eagle Rock in October. Next year, the company plans to open more small-format locations in Koreatown, Burbank and Anaheim.
But Target CEO Brian Cornell envisions an even bigger rollout.
In a conference with investors call late last year, Cornell said he was “increasingly confident” that the company would be opening “hundreds” of small-format stores.
“We think we have the opportunity to enter many, many new neighborhoods,” Cornell said.
EYED FOR THREE TYPES OF AREAS
Company spokeswoman Kristy Welker said Target has focused the rollout in densely populated urban areas, dense suburban regions and college campuses.
“We know there are many guests who have to travel outside their neighborhoods,” she said. “It’s a priority for us to expand this format.”
Burt Flickinger III, managing director for the retail consulting firm Strategic Resource Group, said smaller stores appeal to millennials whose shopping habits are more of a grab-and-go style, and to other hard-working shoppers.
“Many of these people are working two or even three jobs,” he said. “They are cash-constrained and time-constrained, so they want a small store. They don’t have the time or the disposable income to do a full family shopping trip in a store that’s hundreds of thousands of square feet.”
Target is using its small shops to gain entry into areas that don’t have the available real estate to house its more traditionally-sized, 130,000-square-foot stores, and the move has allowed the company to showcase its brand to a new group of shoppers.
WAL-MART’S FAILED EXPERIMENT
But “smaller” doesn’t always pan out.
In January of last year, Wal-Mart abruptly announced it would be closing 269 underperforming stores, including all 102 of its smallest Wal-Mart Express locations. Those stores ranged from about 11,000 to 13,000 square feet.
When that announcement was made, company spokeswoman Delia Garcia acknowledged that the Wal-Mart Express strategy didn’t work, although it helped the company gain a deeper insight into customer preferences.
“The key thing we learned was that our customers are better served through our larger neighborhood markets, which average 30,000 to 45,000 square feet,” Garcia said. “They include a broader assortment of merchandise and better meet the needs of our customers.”