Hamilton business expert: When Target comes to town 'there will be losers'

The U.S. big box retailer moves into Hammer City next month, right across the street from Ottawa Street's independent shops.
Four Target are scheduled to open in Hamilton during the spring and summer of 2013. This store at Barton and Ottawa streets will be one of the first. (Julia Chapman/CBC)

When Trudy Wood was asked about Target moving in to the plaza kitty-corner to her Ottawa Street store, she gave two thumbs up.

"We welcome all neighbours," said the manager of Oxford Mills on the corner of Ottawa and Barton streets. "New businesses, new people will come to the area and come back to the area, we hope."

Wood will likely see more people coming back to the neighbourhood when Target opens up shop at Centre Mall — right across the street from her bedding, towel and home accessories store — in March or April, and isn't concerned that her customers will start dropping dollars in the U.S. big box store rather than hers.

"We offer things that they don't have," she said. "We may sell similar products and sometimes the same product, but we offer very good prices all the time."

But a local small business expert says the well-known red bull's-eye will pull loyal customers away.

"It's the biggest thing we've seen in 20 years [since Walmart]" said Marvin Ryder, a professor of marketing at McMaster University. "There have got to be some losers."

Target will open 24 of its 135 Canadian stores beginning next month. Two of those early openings are in Hamilton, at the Waterdown-Flamborough Power Centre and the Centre Mall location.

Two more are scheduled to open in the summer at Queenston Place in Stoney Creek and South Hamilton Square, confirmed Tamar Nersesian, Target spokesperson.

Ottawa Street stores have outlasted the big boxes before, said Patty Hayes, executive director of the Ottawa Street Business Improvement Area.

"I think people have seen the 'Walmart' effect hasn't been terribly impactful one way or another," she said. "I don't know that they perceive Target to be that much different."

Hayes thinks there will be more interest in Target in the next few months, but "we see that as generating traffic," she said.

Wood, who has 18 years working at the same Ottawa and Barton street store, agrees. Since the Centre Mall has renovated its larger stores like Walmart and Canadian Tire and added news businesses, shopping traffic in her store and in the general area has increased.

"I would say the last six months people are coming back," she said.

In terms of attracting and retaining customers, what smaller stores like Oxford Mills have going for them is the quality of service, Ryder said.

"'If you need three extra towels in that pattern, we'll order them and I'll make sure you get them,'" he said of the personal attention a small retailer can offer. "A Target can't do that."

That's exactly the argument Wood makes of her store.

"We pride ourselves on our customer service," Wood said. "It's hard to get that in a larger store and when staff are looking after departments and are only there part-time. They may not know about their product, but we do."

Even so, Ryder is sure that once all the Target stores are open, the big story of 2014 will be some mom-and-pop businesses perishing to the big red box.

"By January or February of next year, we are going to see some independent stores close," he said. "There will be a fight and I hope they're ready for it."

It may not be the shops on Ottawa Street, he said, but the closing of smaller retailers is "inevitable."

Hayes is confident that her stores, like Oxford Mills, will come out of that fight unscathed.

"There are 11 fabric stores on the street. They're used to competition," she said. "If Target gets thrown in [to the mix], then it gets thrown in."