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Honored Contributor
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Registered: ‎03-10-2010

Re: Target a major fail in Canada - closing all its stores

On 1/16/2015 croemer said:
On 1/16/2015 Lilysmom said:

The job loss is bad. Here is some local coverage on the closure...

TORONTO — U.S. retailers planning to cross the border can learn some valuable lessons from the failure of Target that announced Thursday it is shutting down its 133 Canadian operations just two years after its much-anticipated launch.

Canadians, who had high hopes for the discount retailer known for its broad product selection and low prices, were underwhelmed when they discovered bare shelves and less-than-impressive pricing in the new locations.

It all speaks to the importance of understanding the Canadian market and making a good first impression, says Doug Stephens, the founder of consulting firm Retail Prophet, in Toronto.

"You've got to deliver on customer expectations or exceed them," says Stephens.

Target's missteps could serve as a cautionary tale for other U.S. retailers making moves into Canada, experts say.

Nordstrom recently launched in Calgary and is set to open locations in Vancouver and Ottawa this year. The company will open three stores in Toronto in 2016 and 2017. Meanwhile, Saks Fifth Avenue will open its first two Canadian locations in 2016

Saks Fifth Avenue, which was acquired by Hudson’s Bay Co. (TSX:HBC) in 2013, is slated to open its first two Canadian stores in Toronto in 2016.

Although the luxury retailers are catering to a different demographic than discount chain Target, Stephens says they would do well to heed some of Target's hard-earned lessons.

"Anyone who lives in Canada and has shopped in a Saks Fifth Avenue store or in a Nordstrom store has an expectation that service is going to be absolutely outstanding, that the products are going to be merchandised beautifully and that the quality of everything is going to be wonderful," said Stephens.

"The Bay has a lot at stake here ... They can't afford to let the Saks Fifth Avenue customer down. If they do they'll lose them forever. And Holt Renfrew will simply sit there with its arms folded and say, 'See we told you. You never should have left us in the first place.'"

Retail analyst Mark Satov says the biggest lesson for U.S. retailers considering venturing north of the border is to test the market first by expanding at a gradual pace, rather than opening a huge number of stores all at once.

"You dip your toe into a new market and you learn, while controlling the potential loss," Satov said.

"I'm sure they did their customer research, but there's only so much you learn from a piece of customer research until you get to market and test."

Thanks for your info, since you are in Canada it is good to hear from someone who lives there. I wish Target had done a better job...sorry about the large job losses.

I have seen and talked to people in the Niagara Falls USA Target stre who came down from Toronto - that's a 60-90 minutes ride, plus the border crossing.

They passed LOTS of Canadian Target stores on the QEW to get to the closest store in the good old USA!

Honored Contributor
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Registered: ‎06-20-2010

Re: Target a major fail in Canada - closing all its stores

So they're coming to the USA to shop? Interesting.

Respected Contributor
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Registered: ‎03-09-2010

Re: Target a major fail in Canada - closing all its stores

On 1/16/2015 terrier3 said:
On 1/16/2015 aprilskies said: I like Target, although, dont go there as much anymore. Too bad they didnt stock their shelves or, at least, understand the Canadian shopper or even adjust their strategy once there. Sounds like the Canadians were thrilled to get them. Although, maybe the cost of doing business there was too costly.

I work 20 hours a week in Target pharmacies for a health insurance company getting leads for ACA and individual HI plans.

One of the stores where I work is literally about 5 minutes from Canada.

The store customers are 70-80% Canadian - which is why it's tough to get health insurance leads in that store!

The shoppers have told me that the Canadian Target stores have limited merchandise, not as many national brands and the prices are higher.

They even buy MILK by the gallon (many gallons at a time!) in the USA store. We provide assistance to dairy farmers that keep milk costs lower here than in Canada.

Milk is cheaper here in the US because of many factors ... some of those factors may include things not approved by Canada's FDA.....just because something is approved here by our FDA doesn't mean other countries approve.....I've never been able to get past the different taste of milk since moving here to the US and completely quit drinking it by the glass and only use it for cooking...and most recently we switched to almond milk in our household.....I don't know if the difference in taste is because of what cows are fed here or if it is something in the pasturization process...either way....milk tastes different IMO.

Respected Contributor
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Re: Target a major fail in Canada - closing all its stores

On 1/16/2015 brii said:

So they're coming to the USA to shop? Interesting.

Cross border shopping has been going on for decades!...it's especially lucarative right now because the Canadian dollar is worth more than the American so more bang for their buck....for example...I recently wired my daughter 300 bucks and she received 335 Canadian.

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Re: Target a major fail in Canada - closing all its stores

On 1/16/2015 brii said:

So they're coming to the USA to shop? Interesting.

In DROVES. They come in with lists - Kitchenaid appliances are favorites.

Both the Niagara Falls USA and the Walden Galleria Target stores are at least 2/3 Canadian business.

We were having a lot of trouble getting healthcare leads in those stores. It's a dual project with Target at my company.

Target gave us the average Canadian sales figures for those locations and that explained a lot!!!

Honored Contributor
Posts: 11,126
Registered: ‎06-20-2010

Re: Target a major fail in Canada - closing all its stores

Lower prices are attractive to people.

Honored Contributor
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Registered: ‎03-10-2010

Re: Target a major fail in Canada - closing all its stores

On 1/16/2015 brii said:

Lower prices are attractive to people.

Funny how that works.

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Super Contributor
Posts: 1,771
Registered: ‎01-09-2014

Re: Target a major fail in Canada - closing all its stores

I never shop in Target. Nothing in there appeals to me.

Honored Contributor
Posts: 13,954
Registered: ‎03-10-2010

Re: Target a major fail in Canada - closing all its stores

On 1/16/2015 brii said:

Lower prices are attractive to people.

Canadians shop here whether their dollar is high OR low vs. US currency.

They have to go thru customs and pay taxes too.

But they say the USA Targets have better and more merchandise.

They obviously don't shop at our pharmacies!!!!

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Registered: ‎03-09-2010

Re: Target a major fail in Canada - closing all its stores

Interesting comments. Having regularly shopped both sides of the border, the US and Canadian stores were a different experience. A few months after they had opened in Canada, the CEO was publicly apologizing for the dreadful launch of Target in Canada. They went out of their way to apologize in the hopes of turning things around. There was no stock in stores, empty shelves, for many weeks. Sadly, they never recovered from the misstep. Their stores are empty. Today the news reports that the loss to Target for entry in the Canadian market is $7 billion.

I don't know the number, but they opened many many stores at once. The ones they occupied locally they renovated for almost a year. There are no winners in this story unfortunately and other U.S. retailers are taking it much more slowly, one or two stores at a time. I believe the person behind the Canadian strategy has been fired.