In “A tough turnaround ahead for Target in Canada,” Globe and Mail retail reporter Marina Strauss attempts to explain why Target lost $1 billion in its first year in Canada rather than turning a profit, as the company predicted.
She notes that Target admittedly started with unrealistically high expectations. I’ll add that the press bolstered them, by turning nearly every discussion of retailing in Canada into a discussion of how Canadian retailers plan to compete with Target.
But she also notes that Target did not help the situation by promising a shopping experience like the American Target and delivering one that falls short.
Prices are higher. Although the article cites price differences of less than 1 percent between the US and Canada, after adjusting for the exchange rate, my own experience significantly differs, as do those of other customers.
Selection differs. Although Target offers its store brands here and some unique-to-Canada lines, actual products vary significantly. Some brands carried by Target USA are not carried in Canada, like some in housewares. Target Canada carries some brands that Target USA does not, like Joseph Joseph (a point not made in the article).
Even store branded products differ, because of local regulations. (But why doesn’t Target Canada carry the Market Pantry brand of flavored waters it carries in the US? I’m addicted to them.)
Selection is typically smaller. Strauss quotes consumers who note that the selection of sizes in women’s clothes and of M&Ms is significantly more limited in Canada. Strauss notes that Target Canada stores are somewhat smaller than Target USA stores, by about tens of thousands of square feet.
But perhaps one of the biggest challenges Target Canada faced was emotional. The red and white color schemes are remarkably similar to the Zellers stores they replaced.
Strauss closes the article by citing several experts who expect Target to turn things around. I’d like to believe it, but the most recent experiences suggest that any turnaround efforts are only behind the scenes right now; consumers are still seeing empty shelves, smaller selections, and higher prices.
And this is extremely disappointing to report given my fervent (and continuing) loyalty to Target.