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Target’s northern expansion has, for the most part, been a disappointment, with high prices and inventory issues. (Tim Fraser For The Globe and Mail)
Target’s northern expansion has, for the most part, been a disappointment, with high prices and inventory issues. (Tim Fraser For The Globe and Mail)

Target’s grand opening gets lost in Canadian translation Add to ...

It is an illness known to many working parents – by which I mean, mothers. Try as they may to tame their overachieving instincts, they relapse, falling into the bad habit of attempting to cross off every item on a to-do list of phone book proportions.

On a typical day, this involves rushing from a dentist appointment to a soccer field, trying to impress colleagues with insightful work, navigating end-of-day traffic to meet the plumber, buying – and labelling! – school supplies, and squeezing in a 10-kilometre run, as jogging offers the most bang for the buck (on a fitness-to-time-spent ratio).

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This foolish endeavour is doomed to fail in exhaustion. There are always more urgent tasks than can fit in a 24-hour day. But at long last, the stressed-out parent had an ally – Target Corp., the American retailer that sells cilantro, toothpaste and cheap-chic clothes for preteens who wouldn’t be caught dead wearing anything from Wal-Mart. Or so she hoped.

For Canadians who visit Target stores each time they travel to the United States, there was an implicit promise. Prices would be cheap, shelves would be well-stocked – as the phrase “one-stop-shopping” suggests.

Too bad, then, that Target’s arrival in Canada has been such a disappointment, as the latest consumer-satisfaction survey from Forum Research showed: The American discounter ranked last among major chains in the country.

Canadian consumers envisioned Target at its American best. Canadian retailers did, too, and have been striking deals and alliances at a feverish pace to face its arrival. But while it is never wise to underestimate competition, it is also a mistake to assume that coming to Canada from the U.S. is a breeze, given how similar the two countries and their shopping centres often look.

A number of Canadian retailers have learned these cross-border lessons the hard way as they ventured south, from Suzy Shier to Le Château to Groupe Jean Coutu. But it is a reality that many American retailers eyeing the Canadian market have yet to grapple with.

For newcomers, the best retail spaces are hard to come by and are time-consuming to negotiate. Target was lucky to land the former Zellers stores, but it paid a hefty price – more than $1.8-billion – for this expedient solution. Upscale retailers such as Nordstrom and its discount Nordstrom Racks have less ambitious plans but still need to find choice locations.

Wages are higher in Canada. In the United States, the federal minimum wage stands at $7.25, compared with $10.25 in Ontario and $10.15 in Quebec. And while some American states legislate a higher minimum wage, others have none. The labour movement is stronger in Canada, as Wal-Mart found out as it battled unionization campaigns in Quebec and in Saskatchewan.

Distribution costs are also higher in Canada because of elevated fuel costs and a less-densely populated territory.

Then there is the language barrier for retailers who want to move into Quebec – Target has yet to open full-scale in the province. The issue goes beyond translating the company’s policies and its website, which a number of retailers have refused to do, even if this contravenes the province’s language law. Urban Outfitters pulled the plug on its Quebec website and stopped delivering in the province after it ran afoul the Office de la langue française, which drew negative comments in the social media and in the press.

The province’s language law also requires chains to adapt their names in French (Kentucky Fried Chicken is Poulet Frit Kentucky), but six big retailers – Wal-Mart Canada, Best Buy, Costco, Gap, Old Navy and Guess – refuse to do so and are now challenging the Quebec government in court.

Evidently, Target was too ambitious when it decided to open 124 stores in Canada in 2013, but the American retailer should be able fix its low inventory and distribution issues in the near future. Landing perfectly in Quebec and adjusting its prices to Canadian expectations might prove trickier, however. Target’s success in Canada rests on getting these things right. Overstretched parents won’t go for the chic without the cheap.

Follow on Twitter: @S_Cousineau

 
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