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Target says Canadian stores will boost competition, benefit all shoppers

Target Canada president Tony Fisher leads a tour of the company's first Canadian store in Guelph on March 4, 2013.

Tim Fraser/The Globe and Mail

U.S. discounter Target Corp.'s arrival in Canada will force other retailers to become more competitive and benefit all shoppers, says Tony Fisher, president of Target Canada.

"It will make everybody else better," he told about 800 people at a question-and-answer session on Tuesday after having addressed a Canadian Club of Toronto lunch.

Target opened its first 20 stores this month – with four more coming on Thursday – and will officially launch them all on April 5 with flyers to tout their products. But the high-profile roll-out, anticipated by consumers and rival retailers alike – hasn't been without hitches: The U.S. chain has struggled with empty shelves, as it deals with unexpectedly heavy demand, while some shoppers have complained of higher prices than at its U.S. outlets.

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Mr. Fisher said he had planned the openings this month as "soft, quiet" events to test the Canadian waters. "It was anything but that, which was a good problem to have but it means that we were really chasing a lot of business and chasing inventory."

The process forced Target to think of how it could most efficiently replenish its shelves, he said. Even in its store in Milton, Ont., which is across the street from its distribution centre, products were out of stock.

"We have tens of thousands of items in our stores that never had sales history," Mr. Fisher said. "To bring that on for the first time – did we get it right? ... How do we need to react very quickly so we can maintain our brand standards?"

Lisa Gibson, spokeswoman for Target, said later that the traffic at stores has been so heavy it "could easily be compared to Boxing Day, except rather than one day it has been multiple days."

"This soft opening period was designed to understand guest traffic and how guests shop our stores. Demand has been high on a consistent basis and we are working hard to replenish the stores."

Mr. Fisher, in response to a question, said Target's prices are higher in Canada than in the United States for a variety of reasons, including higher rates for transportation, wages, taxes, duties and costs of goods.

He said Target has built its business model here on being competitive with the lowest-cost retailer in Canada – but not necessarily its U.S. equivalent.

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"The scale that we have here in Canada is quite different than [the] incredibly densely populated U.S. marketplace," he said.

Shoppers can continue to cross the border for Target's U.S. prices, he added. "I still work for Target," he said. "We are not trying to compete with ourselves – we want to come in and compete with the retail landscape here."

And because Target had the benefit of planning its arrival here over two years – it announced in January, 2011 that it was coming – "it was equally great for all of our competitors to have two years to plan for our arrival," he said.

He said the discounter's brand recognition was already high in early 2011. At the time, about 30,000 Canadians already held a Target REDcard credit or debit card, which gives them 5 per cent off almost all purchases online and in U.S. stores. Today, 44,000 Canadians carry a Canadian-issued REDcard, he said.

"I have to admit this has been not only the most rewarding time in my career but also the most stressful in my 14 years here at Target," he said, pointing to 124 stores that the retailer plans to open in Canada in 2013. "...There's still so much left to do."

On a personal note, he said his integration into Canadian life was made easier for his family after his three children made it onto their minor league hockey teams and met new friends quickly.

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When he first told his children in early 2011 that they were moving to the Toronto area (they live in Oakville, Ont.) from Minneapolis, the boys – as die-hard hockey fans – were "fired up" because Canada is such a great hockey country, he said.

But when they thought about moving to Toronto, "they said, 'Can we move to Vancouver because they're No. 1 in the league right now.'"

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