Target head hits ground running
TORONTO — Target executives vowed this week they would get far more aggressive about formulating a plan to fix Target Canada, and its new president has now specified just how fast that will happen: 30 days.
“After 30 days, we want to have an aggressive road map towards improvement,” Mark Schindele said Friday in his first round of interviews after the announcement of Tony Fisher’s swift exit from the top job in Canada on Tuesday.
Target is under the gun to turn around its lacklustre business amid mounting losses in the Canadian market, where it has been stung by operational and fulfilment issues leading to product gaps on store shelves.
In the past four days, Schindele has hired two external firms to conduct operational and strategic assessments of the retailer.
“We have been hearing from our guests that we did not bring the true Target experience,” he said. “We have let our guests down. And the biggest thing that’s in the way right now of us doing that is, we need to fix our operations. I believe we are going to get to the root cause of the issues and fix them and have a sustainable solution. And that is our goal, within 30 days, to have a plan that will fix our issues one time, and be done with it.”
Schindele said it is too early to offer an opinion on whether the retailer may close some of its weaker outlets, a cost-cutting mea- sure suggested by some industry analysts.
“We include locations, operational factors, many parts in the assessment,” he said. “It’s really too soon to say. So many of our stores just opened, and it’s really too early to tell.”
Target remains on track to open nine new Canadian stores this year for a total of 133, and estimates it will reach revenue of $2 billion US. It has not updated its long-range guidance for the market beyond its initial expectation of hitting $6 billion in sales by 2017.
It’s expected the extensive operational experience of Schindele, former senior vice-president of Target’s U.S. merchandising operations, will help iron out kinks in its supply chain and store in-stock positions.
But beyond righting the systems and supply chain issues leading to some bare shelves, a critical issue is getting Target customers to buy more groceries and household essentials.
Consumers shop at retailers who sell groceries more frequently than they visit other stores. And while customers have embraced its home decor and apparel lines, luring more people in to buy cheese and laundry detergent is also critical to Target’s success.
“Our goal is to offer irresistible deals that will bring them back in as we fix operations,” Schindele said.
Since opening in Target Canada has offered the same price-matching guarantee on rivals’ flyers that Walmart has long made, but it features a much smaller food section.
This week, Target Canada reported a first-quarter loss before interest and taxes of $211 million compared with a loss of $205 million in the corresponding period a year ago.
That came after losing close to a billion dollars in this market during fiscal 2013.
In addition to bringing in Schindele, the Minnesota-based company will be hiring an expert in the Canadian business marketplace.