5 Reasons Why Target Failed In Canada

Sad news for many learning Target is closing down all of its 133 Canadian locations due to low sales over its short Canadian visit. The American retailer attempted to woo Canada since March of 2013 only to be rejected less than two years later. Definitely an epic fail your kids and grandkids will study in future marketing and business courses. So which factors contributed to Target’s billion dollar blow?

1. Fierce Competition

Target never had a chance with massive chains like Walmart Stores Inc. beating out prices left, right and centre. If you can’t find what you’re looking for in Dollarama, you will find it in Wal-Mart. It is simply your default one stop shop for low-priced goodies. Other competitors such as Loblaws (The Real Canadian Superstore), Costco and Canadian Tire prepared for Target’s entrance by strategizing on better offers and services.

2. High Prices

Many consumers complained about Target’s high pricing and lack of product variety. Although Canadians were familiar with Target’s brand, having shopped there across the boarder, the product variety was not comparable to the U.S. store locations. 

 A survey done by The Globe and Mail in April 2013 concluded Target prices were more than 1% higher than Wal-Marts’.

3. Empty Shelves

The retailer struggled to find the right mix of inventory with the right amount. Shoppers complained there was not enough of high demand products, leaving shelves looking empty. The company scrambled to correct its inventory management but was unsuccessful.

4. Poor Online Presence

Online shopping has a strong presence in the Canadian market, with powerhouses such as Amazon.com, Shop.ca, Walmart.ca and more, Target failed to capture online presence causing sales to lag behind.

5. Over-Confidence: Too Far Too Fast

Many say Target should’ve tested the waters first, which may have prevented the huge blow. Instead, the retailer boldly opened more than 124 stores in less than nine months. Underestimating Canadian competition and overestimating the consumer brand recognition.

Nevertheless a huge lesson learned for all American retailers eager to expand. Sadly, thousands of employees will soon lose their jobs and landlords of Target locations will be scrambling for new tenants. On the plus side, clearance sales are on, happy shopping!

Click here to read about saving money while grocery shopping. 

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Article by: Anna Suzdenkova

Employed in the financial sector for over 7 years. Held various roles including financial advisor, auto claims adjuster and manager of customer service. Attained an accounting degree with Honours. Mutual fund licensed. Passionate about helping people. Forever an optimist, positivity is the key to a happy life. Enjoys helping people decipher the banking world and use it to their advantage!