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Fashion & Style

What ails Target stores in Toronto?

Posted by Derek Flack / May 9, 2014

Target store TorontoIn the days following former Target CEO Gregg Steinhafel's departure, there's been plenty of talk about the grim state of the retailer's Canadian operations, which reported a nearly $1 billion loss loss in 2013. Some have even gone so far as to speculate that Target will close up shop in Canada altogether, though that seems a bit premature at this point. So what the hell has gone so wrong?

One of the problems that's got a lot of airtime is inventory issues, or rather, lack of inventory. Reports of stores with empty shelves have been widespread since the chain opened, which has frustrated customers. Along with having (typically) less stock than their US counterparts, Canadian Target locations have also been criticized for higher prices than what many anticipated.

These are all significant factors contributing to the slow start, but perhaps the most interesting one from a Toronto perspective is the subject of a recent Reuters article, which suggests that Target's decision to occupy former Zellers locations in "down-market malls rather than up-and-coming retail locations... Target's Canadian woes began with that footprint, while the company's inability to stock the stores with items Canadians want at the prices they expected is what ultimately alienated customers."

It's an interesting theory, and one that's at least anecdotally supported by the warm reviews the new Stockyards location of the chain has received. Zellers died for a reason, and it's tough business when you're thought of as its ghost. Perhaps a few more of these massive downtown locations are just what the retailer needs to help restore its image?

Photo by Greg's Southern Ontario on Flickr

Discussion

36 Comments

cathie / May 9, 2014 at 07:15 am
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We can't buy so many of the products they sell in their U.S. stores. So much product down there, so little up here. As noted, the stores are too small. Also, you can't order from their website as they won't ship up here - so annoying and disappointing. I always go there when I'm in the U.S. - here I've gone once.
cathie / May 9, 2014 at 07:15 am
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I have no idea why U.S. is underlined. Sorry
Disappointed Fan / May 9, 2014 at 07:58 am
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This isn't entirely Targets fault. There was way too much government meddling in their introduction to Canadians. Before Target opened they had to agree to sell a certain percentage of Canadian products. The products they sell are poor quality, typically sold in other Canadian stores. Target commercials (ads) in the US boasted beautiful clothing at a moderate price. Thats precisely why I wanted them here. What we got was same old, same old in addition to low inventory, higher prices, and a slow launch.

If the government continues to meddle you might just as well leave. They need some serious change if they're going to survive here, because if I want to buy cheap, poor quality, ugly products I can hop on over to Walmart.
Jacob replying to a comment from cathie / May 9, 2014 at 08:09 am
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That's one of the problems they're trying to overcome. People had an assumption they'd be able to get US goods at US prices when Target came to Canada.

If that were the case, why wouldn't Walmart, a much bigger and more influential company, have US goods at US prices?


You can't just setup shop and start selling what you carry south of the border. Distribution agreements needs to be made, products needs to pass whatever federal regulations there are, bi-lingual packaging needs to be created. Much of that falls on the manufacturer, not the retailer.

Also, that downmarket thing. In the US Target is a step above Walmart. Here, it's just neo-Zellers. There were a few ideal spots they passed up in Scarborough that they really shouldn't have.
S replying to a comment from cathie / May 9, 2014 at 08:15 am
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I think Blogto comments automatically underline anything with a period but not space because it think they're hyperlinks............................How about opening a Target that doesn't take at least an hour to get to on the TTC from downtown Toronto?
Jenny / May 9, 2014 at 08:49 am
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Wal-Mart is cheaper.
Ryan / May 9, 2014 at 08:49 am
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It's because every Target store is located in Shitsville.
Andrew / May 9, 2014 at 09:10 am
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My wife and I have mostly stopped going to the Target in favour of the somewhat less convenient Walmart. The reason is that we usually don't find what we need at the Target. The selection is very poor (the prices aren't amazing, but that's not what turns us away).

I have to say I miss it as a Zellers. We live near the Thorncliffe location and it was probably the best Zellers I had set foot in and was much better than what's there now (except in appearance).

I used to live near Dundas and Bloor, where the Zellers was quite poor and even a Target like this would have been an improvement, but they didn't snap up that location.
J / May 9, 2014 at 09:32 am
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Stock. Basically stock. Everytime I go into the Target on the Danforth many basic things like kids bedsheets are out of stock. I understand that they are probably popular and go but it's been like that since it opened up last year. The shelfs always look clean but sparse. Get some more stock in there and bring more of the US products over.
iSkyscraper / May 9, 2014 at 09:47 am
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I'm going to go with this theory:

Target tried to follow the old method of expanding into Canada, practiced by other big chains who were early to the marketplace. This method consisted of buying up a lesser Canadian equivalent to get an immediate footprint. Worked just fine when Wal-Mart bought Woolworths/Woolco, Staples bought Business Depot, Home Depot bought Aikenhead's. Sometimes the name out front didn't even change but it was the same model (TJ Maxx and Winners, Best Buy and Future Shop). The new stores were so disruptive to the marketplace that they immediately succeeded, and that bought them time to gradually improve their locations. (Think about it -- how many Walmarts in the GTA today are still in their old Woolworths footprints? I'd say about zero). Plus, many of those locations weren't so bad in the first place because they were the early leaders.

However, that trick doesn't work when you are coming late to the market. Canadian retail is quite saturated now, and Target wasn't doing anything truly innovative that Wal-mart or Costco or others hadn't already done. The more recent method of expansion of US chains into Canada has usually been more gradual, where you start with a store near Yorkdale, and one either in Mississauga or Vaughan, and one somewhere downtown, and one in Calgary, and Vancouver, etc. and then spread slowly from there. Think Apple, Williams Sonoma, Nordstrom, Bass Pro, etc.

So Target tried to pull a 1990s expansion play in a 2013 world. Retail is a real estate game, and those Zellers leases were very sub-par. A few suburban locations were ok but most were lousy. Especially when you're trying to be the more chic option, the stink of Zellers proved overpowering. They would have been better off with a gradual expansion via a few expensive new urban stores (think Target in New York City) and host of sprawling exurban ones.

Target will eventually succeed in Canada, they just went about it wrong.

Now, where's our Trader Joe's?
Eric / May 9, 2014 at 10:00 am
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Some Target products were featured in the Christmas issue of Today's Parent, a Canadian magazine. When we started calling Target stores to find out which ones were stocked, we learned that this product would not be available in Canada. Why would they advertise this in a Canadian magazine, if it wouldn't be available in Canada?
linden / May 9, 2014 at 10:43 am
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I have been once to Target at Square One and completely lost interest. If this is what they are going to offer at the planned store at York 1, I don't thing I would be shopping there at all.
Gloria / May 9, 2014 at 10:49 am
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The website is useless (doesn't show any stock) and the shelves are never stocked well. I LOVE the housewares and decor section and the clothing is OK, but the rest is unremarkable -- I don't go to Target for misc. toiletries or food stuff. The lack of general stock is really killer.
Underwhelmed / May 9, 2014 at 11:31 am
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With all the hype about Target opening in Canada, our one and only visit to the localstore(half-hour-drive)was underwhelming. The shopping experience doensn't compare to the US stores. The grocery section was very small with mostly their own branded products, no fresh produce or meat, and the selection in other departments was poor at best. Why drive distance when we can get better selection and price at Walmart, which is only a five minute drive? I doubt we'll ever shop Target again.
Lloyd / May 9, 2014 at 11:38 am
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For once, with the exception of Ryan, some interesting, constructive and speculative comments. I usually don't read the comments on blogto anymore because it's usually name calling, whining, etc, and nothing constructive.
Moneesha / May 9, 2014 at 12:26 pm
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Maybe the issue is not stock or similarity to US targets but rather that Target couldn't live up to the hype and isn't that great afterall. Generally their customers aren't as heinous as Wal_marts nor CostCo's but cheap made in China crap is still cheap made in China crap.

If people are disappointed now, wait until Nordstrom opens with their uninspiring suburban offerings.
cathie replying to a comment from Gloria / May 9, 2014 at 02:10 pm
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That's another point. The U.S. website - fabulous. The Canadian website - comletely, totally useless.
Rick / May 9, 2014 at 02:34 pm
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Here is the problem with Target as I see it, knowing people that work at the Target Head Office in Mississauga; AMERCIANS!!!

Too many amercian ideas and processes that simply do not work in Canada. They have people form the US head office up here to "manage" and apparently the consensus is that they are all fucked in the head. It's like they are from another planet when they come here to try and impose their will - We're nothing like Amercians, so stop treating us like them!!!

All the amercian executives here in Canada need to be booted out of here for such a dreadfully poor job done to date - Hire Canadian executives with experience in Canada and you'll see the numbers change for the better.


Westender / May 9, 2014 at 03:58 pm
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To Target's credit, they have been purposely amping up the customer service at the Stockyards location ... But unfortunately they don't have that many patrons to serve...
Don replying to a comment from iSkyscraper / May 9, 2014 at 05:50 pm
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Yes please, Trader Joes!
Neil / May 9, 2014 at 05:51 pm
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I go to the North York location by my place all the time. I have no qualms with inventory or prices. I much prefer it to Walmart.
DK / May 9, 2014 at 07:38 pm
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I try and try to give Target my business but the store is often out of stock and staff seem in a hurry not to help but to run about like busy mice. When I've has pricing issues staff are unhelpful. With unanswered comments on there Facebook page even. Who knows there future they've stubbled and stubbled big.
S / May 9, 2014 at 07:46 pm
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I drove 30minutes to shop at Target. It was poorly lit. The sales signs were difficult to understand (what has the sticker, what doesn't, what is the total cost)? The products were horrific quality, from what was left. I did see Canadian Foxy Jewerly....unfortunately it was double what I can buy it online from their website. All I could think to myself is what a waste of time. I'll check out Walmart, Home Depot, Canadian Tire...whoever has the products I want at a real sales price.
Yzzie / May 9, 2014 at 08:25 pm
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When Cloverdale opened I was really looking forward to it, since we always stopped at Target every time we go to the US. I was so disappointed by the empty shelves and the terrible clothing selection.

I work in supply chain for retail, so the price difference didn't surprise me in the least. Duties, taxes, Canadian labeling requirements, the extra freight costs to ship around a country with a lot less density than the US... all that adds up, and if you compare to Walmart the clothing is a better value. But I couldn't get past the walls full of nothing and the lack of product on shelves. They are severely understocked, and that's either a supply chain failure, or poor planning from the buyers.

Now the Stockyards location is open, we went there just to see what was around that new "mall", and it was night and day. Good clothing selection, shelves mostly full, it was a much better experience. For the first time we walked out with everything we needed (and had initially planned to get at Walmart), plus a couple more pieces of clothing I hadn't planned on but were a good deal for fast fashion.

Give them a year to settle in, they need to figure out the Canadian buying patterns - and fix their distribution network to have full stock at all times.
Moneesha replying to a comment from Rick / May 9, 2014 at 09:09 pm
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Yeah because Canadians crave shitty service! Why import Americans who know a thing or two about great customer service. Let's instead replace them with Canadians with zero vision about how to serve a customer beyond the idea "we're a monopoly so people have to shop here".
NV / May 9, 2014 at 09:34 pm
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Something people tend to forget, out minimum wage is a lot higher, and health care, to say nothing of the Canadian Dollar, that all adds to the higher prices. JCrew had the same issues with higher prices when they first opened.
Moaz Ahmad / May 9, 2014 at 10:04 pm
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Speaking for myself...Zellers was absolute crap and the store nearest to my home was used as their liquidation store...so I'm terribly glad that Target came in to replace them. The Target stores have a nicer layout and better products than Zellers...they just couldn't live up to the hype and the early expectations.
paulmezhir / May 9, 2014 at 10:29 pm
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The problem is that Target WAS something special before it opened in Canada. Simply being accessible every day without having to plan a cross-border shopping trip made Target less special the day it opened north of the border. Wegman's is renowned and highly anticipated in the upscale North Atlantic and Middle Atlantic communities where it has been concentrating on opening new stores. To those of us in Western New York, Wegman's is simply the local grocery store.

BigLots is another prime example of misguided retail thinking. The company took a store that was(is) popular south of the border to cross-border shoppers, and thought that it would do just as well in Canada. How long did BigLots Canada last? Six months, maybe? Just because it plays well to Canadians who shop in the US doesn't mean that it will play well to the average Canadian.
Karyn / May 10, 2014 at 12:08 am
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I have gone to the Stockyards location 5 times to purchase my favourite hand soap (Mrs. Meyers - Basil Scent) and it is NEVER in stock. In fact, the whole Mrs. Meyers section has been cleared out pretty much since opening day.

But other than that I really do like how clean and organized Target is compared to dirty Walmart. It makes for a more pleasant shopping experience.
Warren / May 10, 2014 at 02:20 am
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I've never been to Target USA so cannot comment on that aspect, however I do enjoy a weekly shopping trip to Target Thorncliff....

The Good...
- Modern: a couple steps above Walnart and several steps above the dreadfully departed Zellers
- Leisurely, unhurried shopping: few shoppers to bump into
- hassle free returns: they don't even open the box to see that you've swapped the newly purchased item with a recently kaput item from years ago
- 50-75% off seasonal/post-holiday candy
- Some interesting/unique in-house food brands
- Generally ultra-fast checkout

The Bad...
- Stock Issues: if your shopping for sale items... Good luck!

The Ugly...
- Website: even Walmart has a website to check out their products & pricing
- Sunday mall access closure @ 6pm: WTF only 1 entry in/out... Sounds like a fire code issue!
- Fresh&Frozen food wasteland: Lots of expensive, never purchased product... Pull the plug already!
Dee / May 10, 2014 at 10:42 am
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Perhaps after settling here for two year, mayve ethnic marketing would've helped considering WalMart, Loblaws and Real Canadian, No Frills, FreshCo, etc. have actually put that into focus to attract Canada's multicultural landscape. IF Target can't figuire that out, then don't expect people to really come in. Target has no place here if they can't get their strategy beyond the "traditional look of Canada", then no one will give a damn.

And yes, the stocked shelf issue is a big one too. They've been here for three years you'd think that would've been resolved already
tim gueguen / May 10, 2014 at 11:01 pm
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There's something dead and sterile feeling about Saskatoon's two Target stores. They seem to attract fewer customers than you'd expect. They are an improvement over the Zellers stores they replaced because they don't look worn down and poorly arranged, but they feel like they're in the same market range. And some stuff you'd expect to see carried doesn't seem to be, like a selection of men's shoes.
dac / May 11, 2014 at 03:21 am
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I actually really like target. Its so clean and shoppable. Not chaotic like Walmart. Less anxiety. They always have what I need....the only problem for me is that I live downtown and the closest target takes far too long to get to
Sandra replying to a comment from Don / May 12, 2014 at 02:04 pm
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I am a Trader Joe's fan and would not want them to open a store in Canada. I'm quite happy to drive to Buffalo and shop there for the better experience. Trader Joe's would face the same issues as any American retailer.. the Nanny State meddling and silly restrictions on certain products that could be sold, etc and forget about buying Trader Joe's 2 buck chuck wines here..Think how different Whole Foods in the US is compared to Whole Foods Canada. Naw, Trader Joe's would be best to steer clear of opening here.
Don replying to a comment from Sandra / May 13, 2014 at 09:03 am
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Good points, all of them.
Vickie / June 25, 2014 at 10:02 am
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Wow, this article is fastidious, my younger sister
is analyzing these things, thus I am going to convey her.

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