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Target's new Canadian chief Mark Schindele is seen in this file photo. (JIM YOUNG/REUTERS)
Target's new Canadian chief Mark Schindele is seen in this file photo. (JIM YOUNG/REUTERS)

Target’s new Canadian chief: ‘You have to be priced right’ Add to ...

Mark Schindele spearheaded price-matching initiatives at U.S. discounter Target Corp. over the past couple of years, and now the new president of the company’s troubled Canadian division is set to apply his pricing savvy here.

Mr. Schindele, who took over from Tony Fisher at the helm of Target Canada on Tuesday, was instrumental in rolling out year-round online price matching at Target’s U.S. stores in 2013. Now at Target Canada, as he hires consultants to conduct a 30-day assessment of the overall business, he will direct them to consider expanding its price-match guarantee to ensure its prices are in line with those of rivals here.

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“If we find that we aren’t priced right, I’ll lower prices,” Mr. Schindele, a veteran merchandising executive at Target, said in an interview on Friday.

Since launching in Canada in March of 2013, Target has been plagued by customer complaints that its pricing is often higher than that of comparable products at its U.S. stores, and that shelves frequently are empty.

Mr. Schindele said Target’s own research has found its pricing here “incredibly competitive.” But the pricing strategy is crucial for the retailer because consumers decide on where to shop based primarily on prices.

“You have to be priced right,” he said. “Pricing is very flexible. Our competition changes. We have to be very nimble and move all the time.”

Key competitors such as discount leader Wal-Mart Canada Corp. offer price matches, a strategy that is picking up as the market becomes more competitive.

To help overhaul the Canadian operations, Mr. Schindele is hiring two consultants to do a 30-day assessment of the retailer’s problems and draw up a “road map” for recovery. His priority is to get products back on shelves and tailor items better to customers’ needs.

But Mr. Schindele said it is too early to say when customers – Target calls them guests – will see visible improvements in the stores.

“We’ve let our guests down before,” he said. “I don’t want to do that again.”

Already this week, Target launched a beefed-up flyer with a wraparound section touting more aggressive deals on everyday items such as groceries and diapers. The company is investing more in trumpeting its best prices.

Mr. Schindele, who has been with Target for 15 years, faces a big fix-up job at the Canadian operations, which posted an operating loss of almost $1-billion (U.S.) in its first year and another $211-million in its first quarter of 2014.

Now Target, with 127 stores in this country, is going back to basics to revamp the business under a new leadership team, headed by Mr. Schindele.

His arrival came two weeks after the Minneapolis-based Target parted ways with its chief executive officer, Gregg Steinhafel, with chief financial officer John Mulligan taking his place temporarily. as the board of directors looks for a permanent leader. The company has grappled with a massive data breach at its U.S. stores and declining shopper traffic, while its e-commerce lags that of key competitors.

Mr. Schindele said the consultants will study the Canadian operations strategically and operationally, tapping into their “deep experience with the Canadian marketplace ... Thirty days from now we’ll have a road map to have rapid acceleration.”

Mr. Schindele, whose strength is in supply chain and product development, said he’s intent on getting rid of “road blocks” that are getting in the way of the company operating well, specifically “systems configurations” and “current processes.”

The company operates three distribution centres in Canada that are run by an outside logistics firm. From early on, products got jammed up in the warehouses as the company was unable to match products’ bar codes information with its own system data, former employees have said. The process here is different from the one in the U.S., where the company runs its own distribution centres. Mr. Schindele said he could not say whether Target may bring the warehouse operations in-house in Canada as well.

“The 30-day action plan will really give us a jump start,” he said.

He said that Target’s initiative to roll out 124 stores within about nine months last year as well as three distribution centres was a “huge, huge undertaking” in the retailer’s first foray outside of its U.S. home base.

“If you’re asking me if I could do anything different – yeah,” he said. “We would have liked to have not taxed the team as much as we did. But that was the way things were structured.”

Critics have said that Target needed more Canadian leadership in the operations here. Mr. Schindele said that while 90 per cent of his staff here are Canadian, “Canadian counsel is extremely important. At the leadership level, we know that we have the opportunity to add even more experience.”

Two of the five top executives at Target Canada are now Canadian, company officials have said. As well, it’s creating a new position of non-executive chairperson to advise the president – and planning to hire a seasoned Canadian business person in that role.

As senior vice-president of Target’s U.S. merchandising operations, Mr. Schindele made six or seven trips to Canada in the past year to check out the stores here, he said. “We were disappointed in the experience,” he said. “We saw in-stock opportunities and the same challenges I see pictures of.” Photos of Target’s empty shelves are regularly posted on Twitter and other social media. Mr. Mulligan said this week he also struggles with those images. “It is unacceptable.”

Follow on Twitter: @MarinaStrauss

 
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