In retrospect, they probably should have just rolled into the southern Ontario market to see if they can make it here rather than roll out across the entire country all at once in one massive blitzkrieg wave.
This thing was kind of like Napoleon invading Russia and getting destroyed by the harshness of good old mother earth.
When Walmart came to Canada 20 years ago, they started with a much smaller footprint and then just kept slowly expanding and expanding and expanding till they're all over the place now.
I was reading in the paper, that when all is said and done Target is going to lose 7.5 billion on their Canadian experiment. That's a 75 with 8 zeros after it.
I'm not sure if my numbers are right; but roughly speaking this is what I get:
They had 133 stores in Canada.
That works out to a loss of 56 million dollars per store. (7.5 billion / 133)
And if you figure they were here for about 800 days that works out to a loss of $70,000 per day for every store.
It's just mind boggling that a retail store can lose that much money.
It's no wonder they wanted to get out of the Canadian market as soon as possible.
I think their CEO made the right call on Thursday.
It's too bad all those people have to lose their jobs.
The average store had $10 million of renovations alone! The funny thing is that Target and Zellers each look similar as both are red and white. So really, all Targets looked like were repainted and cleaned up Zellers. That doesn't help Target one bit for people who see red paint and think to themselves..... what's this? Zellers part 2?
A major problem right off the bat is that they had Targets everywhere. Even cruddy Zellers in half baked strip malls that closed down were converted into Targets. Better to let those locations die, but they wheeled and dealed with HBC, took them over and decided to come out all guns a blazing with 100 or stores all popping up in year one.
There are endless articles saying why they were doomed and I agree with most points EXCEPT pricing. I don't know where all these people are coming from, but I don't think Target's prices were inflated or greedy. They were similar to Walmart and Loblaws. No cheaper, no more expensive. Actually if you factor in the 5% card, it can be even cheaper. Or that slightly more expensive product is now around even. So to me, all the fuss about pricing is not an issue.
If people's price concern is against Target USA. No kidding. Walmart USA is also cheaper than Walmart Canada. And Best Buy USA and Amazon USA are cheaper than the Canadian version too. So if anyone is complaining about the US price comparison, they are silly. The US chain is always a bit cheaper.
As for store stock, Target was a mess at the beginning, but as time progressed I found their stocked shelves no worse than Walmart. Walmart could have holes too. But I guess people didn't like how it was early on and didn't give them a chance later. Fair enough. You only get one chance to make a first impression. Targets better stock on shelf was probably just a lucky consequence over time. Since there were so few customers buying stuff, they got lucky as more inventory would flow in over time. lol. I was one of the people making a special trip to the Milton store when it opened. I was there on day 3 or 4. The parking lot was jammed and the store was jammed. And shelves sure were barren. And there's no way I could see shelves bare due to customer on days 1-3 buying up everything. You could tell it was just not ready as entire racks and aisles were dead empty.
Target is a redundant store offering as they didn't seem to carry over all the trendy and unique products from the US which people cross the border for. And none of them bothered with fresh food. All their food was pre-packaged and frozen food. So if Target Canada is just going to rehash products mostly selling at other stores, what's the point of Target coming to Canada? You look in that fancy weekly flyer and all you see is Coke, Dr. Oetker Pizza, Tide, DVDs and a tiny smattering of unique homeware products. Same stuff I see in most weekly flyers elsewhere. Zellers carried those cruddy clothing brands that Target licensed to them. Nobody bought them. Target comes and offers the same low end brands. What a surprise. Nobody is buying them either.
The only credit I give Target is that they did a good job renovating their stores into nice, bright clean stores. Nice new shopping carts. Even small things like having sanitizing towels to wipe the handles on your cart. Let's face it. Zellers were old, grimey and HBC never seemed to sink a dime into making them look better.
Edit: I also give them credit for fast friendly service. Nice employees willing to help and check you out fast. The old Zellers crew (mostly old ladies) seemed to care more about talking to one another about their grandchildren than checking you out at the counter. They would also annoy you trying to sell those HBC credit cards. And if someone actually took the bait, you stand there as the cashier would go into credit card mode and try to check out the other customers while also processing a credit card application.
Renos = A
Product offering = C
Product pricing = C
Product stock on shelf at the beginning = F
Product stock on shelf later on = C
Service = B
