Let the Target wars begin.
South Santa Barbara County once again is in pursuit of the iconic red logo that has become a destination for typically female middle-class shoppers seeking home goods, back-to-school clothes and food at discount prices.
Somehow, the South Coast wound up with K-Mart and Sears stores but Target so far has been shut out of the market.
That means each week, hundreds of residents trek to Ventura, Camarillo, Lompoc or Santa Maria to get their Target fix.
But at Target’s headquarters in Minnesota, things have been changing. A serious data breach last year hurt the company’s once-sterling reputation. Earnings and sales growth have been a challenge as the store tries to compete with online behemoth Amazon by recalibrating its own e-commerce efforts. Those challenges caused the company to miss its own profit projections in the second quarter by a pretty wide margin, and analysts have expressed concern that Target is selling too many products at below-margin in an effort to drive traffic to its stores. Late last month, the retailer chose PepsiCo executive Brian Cornell as its new CEO, tasked with turning the operation around and rescuing a botched expansion into Canada.
Amid this backdrop, Target has been rethinking its expansion plans in suburban areas in other parts of the country — including the South Coast — Real Estate Editor Elijah Brumback reported in the previous edition of the Business Times.
The company walked away from an option to purchase a property in Goleta, according to real estate insiders involved in deal negotiations. The retailer is in effect forcing the property owners to come up with more concessions. It is also testing the waters to see if the city of Santa Barbara or unincorporated county areas can come up with a more attractive location.
Most knowledgeable people we’ve talked to think Target will get its concessions and eventually build on its preferred site. That is, so long as the South Coast store actually pencils out — not necessarily a given in a slow-growth economy with very little of the new home construction or population growth that trigger sustainable sales growth.
For now and the foreseeable future, the discount retailer seems to have all the cards and shoppers will continue to trek up and down Highway 101 in search of their Target fix.