After a very short and frustrating attempt in Canada Target, announced today that they will be exiting the market within the next 16-20 weeks. The company stated on the website:
“Target Corporation conducted a thorough assessment and analysis of all available options and engaged a variety of third parties to do the same. Options ranged from exiting Canada, to dramatically reducing the company’s footprint, to closing a few stores. The company was not able to identify a scenario by which Target Canada would become profitable until at least 2021.”
This will go down as a great example of what not to do. Despite being a strong retailer in the U.S. they were unable to get product to the stores in Canada, carve out a price image or deliver an exciting in store shopping experience. The expectations from consumers were high and they had such a great opportunity to generate traffic and sales.
I know we hear about the challenges for retailers trying to break in to the Canadian market. There is one who seems to be rolling and that would be Walmart. The difference for me is that Walmart executes, their pricing is where it should be and the in store shopping experience is what you would expect. The basics of retailing. Walmart is not for everyone but they do have very good prices on the items their customers want to buy. One of the biggest downsides of the Target closure is who will keep Walmart in line? Competition keeps all players in the market sharp and strong competition keeps players even sharper.
This is disappointing for consumers and suppliers. If the Target locations end up in the hands of Walmart their position in the market will be even more dominant. Hopefully others will learn that if you want to be a great retailer you have to have the ability to execute the basics of retailing.