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By Mark Zdechlik, Minnesota Public Radio
July 2, 2001
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Target Corporation has ambitious plans to double the size of its namesake discount chain over the next decade. The company hopes to achieve much of the growth in its relatively new SuperTarget division. SuperTargets add groceries to the store's traditional mix of merchandise. The first two Minnesota SuperTargets are slated to open at the end of July in Shoreview and Rochester. SuperTarget's entrance into Minnesota is prompting promises of a major union organizing campaign.
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One of the newest SuperTargets is about an hour and a half west of the Twin Cities in Eau Claire, Wisconsin. It's enormous - bigger than three football fields, about 30-percent larger than a typical Target store. Despite its warehouse proportions, SuperTarget is designed to feel like an upscale - even intimate - marketplace.
"We really are looking for a theater-type atmosphere," says Eau Claire Manager Tammy Larson, who says that's why deli workers are dressed like chefs. "What we at SuperTarget, which is different than a lot of out competitors, do is we add the fashion and trend into food."
It even applies to fruit. "We don't just pile apples, we lay them nicely and neatly and they all have to be the same direction," according to Larson.
An informal sampling of customers on opening day at the Eau Claire SuperTarget sounded like the store's layout was having the desired effect. "People are always time-conscious and being able to kill everything in one spot is probably the way of the future; this is nice," one woman says.
The superstore concept is not new. Wal-Mart opened its first SuperCenter more than 10 years ago and now has almost 1,000 of them, including five in greater Minnesota. The first SuperTarget opened six years ago. There are fewer than 40 SuperTargets nationwide, and the company says the number will double by the end of this year. Target has even more ambitious growth plans for the next decade.
Retail analyst Mark Miller of William Blaire and Company is bullish on Target because "the key is the company now has an expanded growth opportunity not only to grow in general merchandise, but now also to penetrate the enormous food and retail market."
Miller says Target will probably never catch up to Wal-Mart in the number of its super stores, but that doesn't matter to Miller. He says SuperTarget - a high-end discounter like Target - is not directly competing with Wal-Mart. Miller says the SuperTarget formula is working well and he expects even more rapid growth than the company is projecting.
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One complicating factor as SuperTarget enters Minnesota may be union opposition. The United Food and Commercial Workers Union is launching a major organizing campaign to coincide with the first Minnesota SuperTarget openings. The union is aiming not only at Target, but also at other big retailers, including Wal-Mart, Kmart, Sam's Club and CostCo.
Most Twin Cities-area grocery stores are unionized and UFCW leader Bill Pearson says SuperTarget and the other's threaten to drive down everyone's wages. "If it sounds like we are afraid of them, I am to the extent that there's an awful lot at stake here when you start talking about workers' wages and benefits," Pearson says.
Pearson is spearheading what he says will be as much as a $200,000 campaign aimed at organizing retail workers around the Twin Cities. Pearson says the job market's law of supply and demand are forcing SuperTarget to pay union-scale wages to the people who'll be staffing the company's Minnesota grocery stores. But Pearson says the good wages are limited to the grocery side of the operation. It's the relatively low-wage general merchandise workers the union is concentrating on.
Pearson says an average union grocery store worker earns about $13 an hour plus benefits, which he says is 15 to 20 percent more than average non-union retail employee.
He says the campaign, tagged You are Worth More, could begin singling out retailers. "A lot of negative publicity impacts sales and it doesn't take much to make a retailer look bad. My goal isn't to make them look bad, my goal is to make sure the workers understand that retail sales clerks and retail sales stockers have a right to a good wage and a good benefit," Pearson says.
There are indications Target is concerned about the union's plans. Pearson says UFCW activists recently handing out union information were asked to leave the Shoreview Target that's being transformed in a SuperTarget.
Speaking to reporters following Target Corporation's recent annual shareholder's meeting, CEO Bob Ulrich declined to say whether he anticipated union trouble as SuperTarget opens on its parent company's home turf. But Ulrich says a union would not be good for Target workers or customers.
"We would hope unions would concentrate on situations where there might be a need for them more than at Target, where there certainly is not," he said. But whether Target workers respond to the organizing effort is not up to Ulrich.
University of Minnesota associate professor of industrial relations and human resources John Budd says depending on how far union activists take their campaign, Target, Wal-Mart and the rest could have public-relations battles on their hands.
"I think it's really going to depend on the strength of the case the union can make to the public. With the hotel strike, the union was able to paint a picture of immigrant workers working lots of hours and needing multiple jobs to support a family. It's not clear that the union is going to be able to paint that vivid of a picture in this case," Budd says.
Grand-opening celebrations for Minnesota's first two SuperTargets are planned for late July at stores in Shoreview and Rochester. This fall, SuperTargets will also open in Chaska and in Minnetonka.
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