SummerWinds Nursery and Target

0451.JPG Looks like Bay Area nursery chain "SummerWinds" is looking to occupy the now shuttered Target Garden Center locations. According to, "The first store, which opened in Albany, Calif., in early March, is on schedule to succeed." Sure beats being on schedule to fail.

SummerWinds is leasing the locations with the entrance into Target being closed. Target is the landlord leasing out the space to SummerWinds. "Target will still have a seasonal department that will carry gardening goods during certain times of the year. The primary overlap would be fertilizers and controls. SummerWinds is emphasizing its organic lines to avoid any overlap."

Here is where I think a mistake is being made on SummerWinds part. According to Leo Goria, who is heading up the Target project, "SummerWinds is using a different pricing strategy with this store than it does with its current stores, to the point that if the Target store turns into multiple stores, it will create a new division for SummerWinds. 'The profit margin for this store is just over 40 percent,' Goria says. 'The initial margin at a traditional location is more than 50 percent.' How does that play out in prices? A common perennial in a quart pot is normally $4.99 at a traditional location; at the Target store, it is $3.99.'"

Why the different pricing strategy? Are Target shoppers unable to afford the $1.00 more for a quality plant? Once you start to segregate your shoppers based on perceived ability to pay you have started down the rabbit hole of diminishing profits. It's almost like they are saying, "Target shoppers can't or won't afford plants unless they pay a 40% markup instead of a 50% markup?"

I like the idea of leasing the space out, but why price your stuff differently than your garden center stores? What happens when people walk in and ask that the same plant they saw at your SummerWinds Garden Shop be marked down like the same plant they saw at Target?