Canada troubles hurt Target on eve of price-war season

  • Article by: Janet Moore , Star Tribune
  • Updated: November 21, 2013 - 9:02 PM

Holiday promotions are intense this year, but Target has a special challenge: Problems in Canada already are eating into profits.

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IHATELOGINS0Nov. 21, 13 8:26 AM

No, its plunging because they don't sell things people need. I can't get a key made there, I can't buy a PCV or air filter there, they probably don't even have much of an oil selection there anymore. They completely gutted the automotive, hardware, and sporting goods section over the years. I can't buy ammo of any kind. I only need so many towels, kitchen gadgets, and bottles of ant-acid. Kind of reminds me of why I don't shop at K-Mart anymore. Used to be able to pick up a set of spark plugs, box of ammo, air filter, oil, oil filter, can't do any of that anymore, Why go there? Go buy more usless junk to fill your closets and draws at home. I used to buy alot of books there too and even that has been dummed down to only a few narrow catagories\choices, nothing like it was even 5- 6 years ago, but I can buy 20 diffent brands of pizza cutters.

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movebak2mplsNov. 21, 13 8:44 AM

Right, sales are down because Target doesn't sell ammo, pcv, and make keys. Not because of an uneven rollout in Canada or online competition from Amazon and a poor economy.

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FrankLNov. 21, 13 8:56 AM

IHLS, I completely agree, the only time I go to Target is to pick up a prescription for the wife. The men's section is about the size of a kiosk, and how many cell phone chargers does one need?. Yes many times for the guy things I'll go to a specialty store, but at times I don't want to make a separate trip for a mosquito net or a turn signal bulb. So I pass by Target and go into WalMart.

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FrankLNov. 21, 13 8:58 AM

movebak, you just proved the point. Many of the items Target has dropped are not easily bought on Amazon. Yes they're low profit, but I'm a bigger impulse spender than my wife, and Target loses out.

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mspshadowNov. 21, 13 9:08 AM

movebak2mpls: "Right, sales are down because Target doesn't sell ammo, pcv, and make keys."...Although you're right, IHATELOGINS0 makes a good point. I was in a Super Target last week. I needed a new cellphone and jumper cables. They had a HUGE selection of cell phones. But they only had one brand of jumper cables, and those were sold out. They didn't even have any in stock.

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jd55604Nov. 21, 13 9:11 AM

Most Canadians live relatively close to the U.S. border. Building a large chain store on this side of the border would have made much more sense due to our lower sales taxes and better distribution system. Most Canadians already drive to the U.S. on a regular basis to purchase our cheaper consumer goods so why didn't Target take that into consideration and build their new stores just on the this side of the border?

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ukiddingmeNov. 21, 13 9:13 AM

More corporate layoffs are bound to happen as a result of this. I'm shocked they couldn't look to their Twin Cities neighbor, Best Buy, to see what happens when you over penetrate the Canadian market. Whatever person decided to make this move should suffer the consequences, not the people below them.

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blorangeNov. 21, 13 9:14 AM

This is expected, expanding a retail empire to new territory is an expensive investment. Expecting immediate profits will lead you to things like Best Buy pulling out of Europe after 2 years, eating a massive loss in the process.

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swmnguyNov. 21, 13 9:16 AM

Target's in a tough spot. The US economy stinks. It's a lot worse than the rigged statistics say, and people are catching on. Target's core guest (as they say) has had stagnant and declining income for about a decade.

Retailers have dolled up sales and hidden inflation by "stealth inflation;" selling a 1.5 quart block of ice cream for the same price they used to sell a 2 qt. block; selling 42 oz. cans of coffee for the same price as the old 48 oz. can, and selling thinner and thinner denim, etc.

Internally, corporations have frozen or cut wages and benefits at the bottom and middle level, turned full-time jobs into part-time, and outsourced and offshored as many tasks as they can.

In Canada, Target is learning what other retailers have learned before. We in the US love to complain about regulation, but the rules don't really apply to everyone. In Canada, even wealthy corporations have to follow rules. Target has gotten into trouble trying to sneak US employees in to Canada to do certain jobs, and Canada won't allow it. Canada also won't allow various tricks commonly allowed in the US.

Most of Canada's population lives an easy drive from the US. They can cross the border and buy at a lower cost from stores located where rules go away in exchange for campaign contributions.

Former CEO Bob Ulrich always said he had no interest in Canada, and was remarkably honest about the reasons. Seems Mr. Steinhafel wasn't listening closely enough.

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mjcmspNov. 21, 13 9:27 AM

I generally like Target and their grocery department is one of the cheapest around, but in recent years I've been getting more and more disappointed. Men's clothing seems to be getting worse, often times I'll need a very basic article of clothing (like a plain cotton henley) and I'll go there and they won't have it. They also really need to beef up automotive...

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