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Why Canadians are paying more at Target Add to ...

It's finally here. After more than two years of giddy anticipation among shoppers and anguished hand-wringing among domestic retailers – both of which began virtually the minute Target announced it was bringing its chic-but-cheap retail mojo to Canada – the Minneapolis-based retailer started opening the doors of select stores across the country in early March.

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Tony Fisher, a 38-year-old former baseball player, is leading Target’s charge here in Canada – which, at 124 stores coast to coast in 2013, is the largest Canadian retail invasion ever (nudging Walmart’s 122-store offensive in 1994). Fisher sat down with Marina Strauss for an exclusive interview about leading Bullseye into unknown territory.

It’s unprecedented for a retailer to come to Canada and open so many stores all at once and to fully renovate them. Not only that, but there are very high expectations. So how are you going to manage that?
You know, we spent a lot of time on what we called a Listening and Learning tour, starting in early 2011. We had a lot of insight from Canadians already—we had over 30,000 who held a REDcard [see footnote 1] and over three million Canadians who had shopped at Target within the last year. But we wanted to talk to other people who would be our future guests. I remember being in Halifax [2] and learning about the explosion. Do you know about that? It’s fascinating. I mean, it emptied the entire harbour.

Yes, and that’s why they...
You go around the country and you come to realize that there are so many differences. But it gave us great insight into what the expectations are and, to sum it up, the good news is that the expectations are very clear and consistent. And the guests want that same Target brand experience that they’re used to seeing in the United States. Canadians’ biggest fear,Marina, is that we’re going to change something for Canada. Don’t make Target Lite. So we are deeply committed to making sure we replicate that brand experience, which is about bright, clean stores, wide aisles, trend-right merchandise [3], great guest service, short checkout lines and incredible value. All these things that are part of our brand,we want to bring to Canada, and the expectations are quite high.

There are also high expectations around low prices. Will they be the same prices as in the U.S. or will they be comparable to other retailers in Canada?
We’re very keenly focused on price. We’ve talked a lot about the fact that we are going to be incredibly competitive within the Canadian marketplace.

We’re about to see a study come out on pricing in Canada versus the U.S.
I don’t think it’s going to make anybody feel better, because there’s the reality of the vast geography that is Canada and increased fuel prices and different wage rates [4]. There’s the reality of just the lack of economies of scale across a country this size, with a population that’s 10% of what it is in the U.S. So when we pull that together, we’ve built our business model to be incredibly competitive with the lowest-price leaders in Canada. On top of that, you have the 5% rewards we’re going to be offering.

The Globe just commissioned a survey comparing prices on a basket of items at Walmart here and in the U.S., and they were almost 23% higher in Canada. How will consumers respond to that, do you think?
I think we’re going to be very clear with our value proposition. Walmart has a different brand strategy than we do. “Save Money. Live Better”—they’re deeply focused on that. We talk about “Expect More. Pay Less.” So yes, you pay less, but it’s also about the “expect more” side. You can expect a brighter store, a cleaner store, wide aisles, in-stock merchandise, trend-right merchandise. We just announced a design partnership with Prabal Gurung [5]. We’ve also announced a partnership with Fondation de la mode de Montréal and the Toronto Fashion Incubator. You can’t get that anywhere else. We’re bringing that focus on design and innovation to Canada.

What have you found on the labour side here in Canada?
Wages can be anywhere from 10% higher to well into the teens, depending on the province. For example, Alberta has a 4.5% unemployment rate. You have people with varied levels of education making six-figure salaries in the oil fields, and we want to tell them the story about a retail career at Target. I remember being in Edmonton, where people weren’t even familiar with the Bullseye. And it was great for us to realize that, because it meant that we had more work to do, not only educating people on our retail brand, but also our employment brand. What does it mean [6] to work at Target?

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Follow on Twitter: @MarinaStrauss

 
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