Katherine P. Harvey (2014) I her article “Tiny Target store coming to South Park,” describes the intentions of Target to expand its business to various regions. She notes that Target intends to open the sixth TargetExpress store by July next year in South Park. The store shall replace Gala Foods Supermarket found along Grape and Fern streets. The owner of Gala Foods Saad Hirmez asserts the he has been looking for a new tenant for some time until Target expressed its interest in the premises. Hirmez Brothers had been doing the grocery business for over forty-six years and have since begun getting old. Therefore, they decided to scale down. In fact, they intend to close shop by 1st November and lease the property to Target, who can renovate it. The upgrading shall make the premises modern and hence be able to attract other investments in the region.
The entering of target in South Park has angered some of the residents. Those against argue that Target’s entrance shall hold smaller quantities of goods that the other shops offer, and hence would edge them out of the market. On the other hand, those who support the Targets entrance into the market argue that it shall attract other investments, such as a bank. The bank is beneficial to the residents since there is no any bank in the neighborhood. They also argue that goods shall be available in the Target store eliminating the need to travel to Mission valley for some necessities. Hirmez is working with Target to ensure that some of the investments, such as a parking lot, Mariscos food truck, recycling centre, and Drive-thru coffee shop keeps on operating since the residents depend on them for livelihood. He also notes that Target shall spend millions in the regions something that could not. However, Hirmez notes that small shops must have to keep with the competition as larger stores takes up large portions of the markets. They also increase the lease amounts in the neighborhood something that is detrimental to the small shop owners.
There are several aspects in the article that can affect the stock prices of Target. First, the expansion to South Park in itself increases the economic base of the company. Many people would project that the earnings of the company shall increase in the near future. Therefore, they shall buy stocks of the company leading to an increase in stock prices. However, the expansion may hurt the profits of the company in the short-term time limits leading to temporary decrease in the stock prices.
Secondly, Target has changed its economy policy. Previously, Target had majored in large stores, however, as indicated, it has since ventured in small stores that can serve niche markets. Due to such a move, in most scenarios the earnings of the company increase and hence the stock prices increase as more people purchase them. At other instances, such a move may negatively affect the earnings of the company reducing its profits and consequently leading to decrease in the stock prices of the company.
Thirdly, the news on the expansion to south Park may affect the stock prices of Target. In some cases, positive news produces a hype that positively affects the stocks. Shareholders have a tendency to promote specific stocks in the market with the intention of increasing their eventual profits from an increase in the profits of the company. Therefore, in the event that the Target shareholders do the same, the prices of the Target stocks shall increase. In some cases, the hype does not necessarily have a truthful basis; the positive news is enough as the case of target.
Reference
Katherine P. Harvey (2014). Tiny Target store coming to South Park. Accessed on October 9, 2014 from http://www.utsandiego.com/news/2014/sep/15/target-express-south- park/2/?#article-copy
