Costco, Mother Nature Frown on Target's Manhattan Debut
For years, Target (TGT) has teased New Yorkers with suggestions of its imminent arrival, plastering its logo on billboards and opening pop-up shops, but with its first location in the Manhattan ready to open on July 25, the omens aren't looking good.
The most important one involves Costco (COST), Target's soon-to-be neighbor in the East River Plaza development in East Harlem. Costco has laid off workers due to slow sales and complaints from customers about a parking charge that can exceed $4. But parking fees, not uncommon in New York, aren't all that's troubling Costco. East River Plaza is about a half a mile away from the nearest New York subway station. The walk back and forth from the subway station would be daunting in any case, but the local police precinct also led Manhattan in 2009 robberies, taking the prospect of relying on mass transportation from bad to worse.
Target faces another transportation complication. Its Manhattan location is opening only a couple of miles south of a sister store that's just across the East River in the Bronx. So many consumers who might drive to the East Harlem Target have an alternative they can reach more easily. That's true of nearby Bronx residents but also a fair number of folks in upper Manhattan. Oh, and the Bronx sister store is on a subway line.
Other mass-market retailers in New York have taken the need for mass transportation into consideration. Among its adaptations to the city, an IKEA along the East River in Brooklyn's Red Hook section subsidizes a regular water taxi shuttle to Manhattan that is free for customers. Kmart, Target's discount store rival in Manhattan, has two stores, including one in Midtown located right atop Penn Station, a subway, commuter train and Amtrak station. The other, downtown in Greenwich Village, actually has an entrance built into the Astor Place subway stop.
Costco's entrance into New York was relatively low key, and its challenges have caused little comment beyond its immediate vicinity. Target's long New York tease, however, makes the company's debut in Manhattan more conspicuous. Any problems it suffers will subject to loud reporting by the New York media that will echo along Wall Street's concrete canyons.
As July began, even Mother Nature seemed to chime in on Target's fate. Two deer showed up at the retailer's central Bronx location in the Kingsbridge neighborhood. The deer traveled down the tracks of the Metro North commuter railroad from more rural points north, then hopped off to run free about the Target parking structure. Perhaps the route they took and their subsequent behavior was a message: Life the in the Big City might be more complicated than the company has experienced in more countrified environs.
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