Could Target's urban format come to Canada?

In late July, Target Corp. is set to open CityTarget stores are for urban locations, hoping to boost sales growth in a weak U.S. economy.

As the retailer ramps up for entry into Canada next year, the new format gives Target a chance to learn how to operate in existing locations that are smaller than its typical stores, knowledge that should help the Minneapolis-based chain as it gets ready to open stores here, says an article in Reuters.

"The Canada team and the CityTarget team talk almost weekly," said Mark Schindele, senior vice president of merchandising, in the article.

CityTarget stores have been two years in the making, with the company talking to shoppers, creating slimmer checkout lanes, new sleeker signs and displays and testing how to use smaller back rooms for deliveries.

For example, trucks delivering goods to CityTarget are six inches shorter than usual to fit into tight spaces such as under the elevated train tracks in Chicago.

And the trucks also measure 28 feet long, compared to the typical 53-foot trucks Target uses, says the article.

Also, unlike other big-box retailers' similar urban formats, namely Walmart's smaller Walmart Express that focus on groceries and other basic goods, CityTarget will carry everything from food to jeans.

What the stores won't carry are items such as lawn fertilizer and large furniture that would not appeal to urban dwellers.

However, in scaled back sections such as baby goods and electronics, shoppers can scan codes with their mobile devices to see Target's full selection and order online, said the article.

Reuters reports that the CityTarget stores are about two-thirds the size of a typical Target, with the average size about 80,000 sq. ft. to 100,000 sq. ft.

Typical Target stores are 135,000 sq. ft; Super Targets are 175,000 sq. ft.

The first locations will open on July 25 in Chicago, Los Angeles and Seattle, where the company already is already well established.

CityTarget in Chicago is roughly eight times as large as Walmart Express stores in the city.

As CityTarget stores are housed in pre-existing space, they are more expensive to operate and build, Schindele said in the article.

The Chicago store for example, is housed in a 113-year old historical landmark constructed by architect Louis Sullivan in the heart of the city at the corner of State and Madison Streets where nearby retailers include H&M, Forever 21, Office Depot, Nordstrom Rack, Sears and T.J. Maxx.

Old floors had to be removed and dozens of coats of paint stripped off of columns to give the store the CityTarget look.

The shelves at CityTarget are bright white rather than almond-coloured, while brushed silver racks are used to display clothing.

And for the first time in a Target chain, music plays in the Chicago and Seattle locations.

CityTarget is also part of a test of special areas for selling Apple Inc devices, with Wi-Fi in each store to allow shoppers to test iPads and browse for items not in the store.

It's this focus on design Target hopes sets itself apart from Walmart.

"They're very good at profitably co-existing with Walmart, but they're also good at trying to figure out what they can do that the competition can't really do well," said Barclays analyst Robert Drbul to Reuters.

Target is in talks with every major city to open this new urban format; later this year, stores in Los Angeles and San Francisco will open.

Could Canadian stores be far behind?