Is Target Corporation (TGT) Stock the Beneficiary of This Rival’s Mistake?

Another rival quietly expanding its presence up north is Costco Wholesale Corporation (NASDAQ:COST), which has been in the country since 1985, and enjoyed a 12% boost in Canadian sales last year to $15.7 billion. Similarly, Whole Foods Market, Inc. (NASDAQ:WFM) wants to open 40 stores there and eventually achieve some $1 billion in sales.

Sure, that means the competition would be stiff for Safeway, but it also indicates there’s plenty of opportunity for growth. Target Corporation (NYSE:TGT), as the latest entrant, will not only steal share from its rivals, but can establish itself as a major presence. Its first 24 stores generated $86 million in sales this quarter with a gross margin rate of 38.4%, well ahead of the 30.7% rate achieved in the U.S.

With Safeway making the mistake of withdrawing from the field of battle, I think it’s Target’s war to lose, and I don’t see that happening. Instead, expect its stock to go north on this Canadian clipper.

The article Is Target Stock the Beneficiary of This Rival’s Mistake? originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale (NASDAQ:COST) and Whole Foods Market. The Motley Fool owns shares of Costco Wholesale and Whole Foods Market.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.