Today, January 15, 2015, Target has just announced it will be completely pulling out of Canada with immediate plans to liquidate all assets and has received creditor protection. This means they will be closing all 133 stores as soon as possible and 17,600 employees are about to start looking for a new job. After being open for less than 2 years in Canada (they opened in March 2013) with such high hopes, what led to Target closing their doors so early?

For anyone that has been following Target you will not be surprised because they have lost well over a billion dollars on their Canadian launch and are expecting they will not be able to turn a profit for at least another six years in 2021. But why is it that the retailer where many Canadians use to drive across the border to shop at is failing miserably in Canada? When Canadians, including myself, entered Target shortly after it’s opening in Canada we expected an experience similar to what we would have received in the US. Target is known as the store that is a quality discounter, you expect quality products at lower than normal prices and that is exactly what Canadians get when they go across the border so why would we expect anything different in Canada? This is exactly where Target failed. They didn’t continue to deliver the prices us Canadians were used to but instead their prices were higher than many of their direct Canadian competitors who had entered the market a long time ago such as Wal-Mart, Canadian Tire and Loblaws.

“They say ‘this is going to be a cakewalk.’ But, in fact, you cannot rest on your laurels, your reputation, coming into the country. The market in Canada was Target’s to lose, there was such high anticipation,” Stephens said. “But you still have to come in and wow people and Target didn’t do that. They failed to bring a unique assortment of products and they got the basics wrong, like not stocking the shelves.”

“It was a good thing and a bad thing that people knew the Target brand,” said Maureen Atkinson, a retail consultant at J.C. Williams Group, “the bad thing was people expected what was in the U.S. stores and the Canadian stores just simply don’t have the same kind of magic.”

Target has nobody to blame but themselves. They decided that they were going to adjust their prices higher than the US because typically Canadian prices are higher but they did not adjust to the other aspects of the Canadian market. Canada is a very multicultural society and other stores adapt to their local target market very well. If you go into the local Superstore (Loblaws) or Walmart in my area, you’re more than likely to find a lot of South Asian and Chinese food because my area is mostly populated with this demographic. Sometimes you may even find signs written Punjabi, Hindi, Cantonese or Mandarin.

Basically what happened is Target brought all the bad aspects of their American stores to Canada and forgot to bring all their good aspects that Canadians had already associated with the Target brand. Hopefully future stores such as Nordstrom will learn from this failure and be better prepared for the Canadian market.

Source: CBC; Canadian Business