Target Sets Bullseye on Canada

October 29, 2013  by in Business Strategy, Furniture Retailing, Industry   

The final store openings for 2013 “mark a major milestone in Target’s history,” said Tony Fisher, president of Target Canada. The retailer ­typically opens about 20 locations in the United States per year.

“It’s very clearly Target’s largest new store growth ever in a year,” said Amy Koo, an analyst at the Kantar Retail consulting firm in Boston. “And they managed to hit the mark.”

The rapid expansion hasn’t been entirely smooth. The retailer expected the Canadian stores to be profitable in the fourth quarter this year. Now the profitability expectation has been moved to the fourth quarter of 2014.

Analysts say Target underestimated the popularity of apparel, home furnishings and staples. Even though the rollout began in March, empty shelves have continued to embarrass the retailer.

In a visit several weeks ago, Koo continued to notice open shelves in such areas as laundry care. “It has a long window for ordering — several months — so whether it’s appropriately aligned for the holiday is an open question,” Koo said.

Pricing has been another issue: Before the launch in the provinces, many Canadians were accustomed to getting lower prices at Target stores in the States. Seventy-five percent of Canada’s 35 million inhabitants live within 100 miles of the U.S., so crossing the border to shop is a normal ­ritual for many.

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Source: Minneapolis Star Tribune