The Last Days of Target Canada

Friday, April 29th, 2016

Target Canada failed big:

Roughly two years from that date, Target Canada filed for creditor protection, marking the end of its first international foray and one of the most confounding sagas in Canadian corporate history. The debacle cost the parent company billions of dollars, sullied its reputation and put roughly 17,600 people out of work. Target’s arrival was highly anticipated by consumers and feared by rival retailers. The chain, whose roots stretch back to 1902, had perfected its retail strategy and grown into a US$70-billion titan in its home country. Target was a careful, analytical and efficient organization with a highly admired corporate culture. The corporation’s entry into Canada was uncharacteristically bold—not just for Target, but for any retailer. Under Steinhafel, the company paid $1.8 billion for the leases to the entire Zellers chain in 2011 and formulated a plan to open 124 locations by the end of 2013. Not only that, but the chain expected to be profitable within its first year of operations.

(Hat tip to David Foster.)


  1. Slovenian Guest says:

    For non Americans, Target is the second largest discount retailer in the United States, behind Walmart. It’s like a mix between LIDL and Spar supermarkets here in Europe.

    Speaking of, more spectacular was the Walmart exit from Germany, where they admitted defeat back in 2006, sold their 83 stores, laid off 11,000 employees, and incurred a loss of $1 billion. Just google Walmart + Germany for details. Or Korea; they closed shop there in 2006 as well!

    And no wonder, Oreos taste like crap compared to even cheap German store brand cookies; it’s not even close!

    Which you will be able to see for yourself, sooner rather than later:

    Two highly competitive German grocery stores, Aldi and Lidl, are plotting to take over the US.

    Aldi is now expanding rapidly in the US — it currently has about 1,500 stores and plans to open another 500 in the next two years — and Lidl is on the cusp of launching its own growth strategy. Lidl is expected to open roughly 100 stores in the US by 2018, according to Deutsche Bank.

    Via business insider.

  2. Buckethead says:

    They just opened an Aldi’s in my little town in VA. Wife went there and was very impressed. It’s in the same plaza as the Walmart, so they’re clearly willing to go head to head with them in the States.

  3. Graham says:

    I hardly know the full story but a lot of the coverage in Canada during Target’s prolonged collapse — the negative feedback started within weeks of the stores’ much ballyhooed openings — was on their appalling logistics failure.

    They seemed to have sewn up a great network of suppliers and transport but had in fact somehow failed. Many stores just couldn’t get their advertised product on shelves in any quantity, or sometimes at all. The only one I was ever in always seemed just a tad tidier and smarter looking than any local Walmart, but with too little on the shelves the main reason. Sometimes big empty spaces.

    Lovely, for a discount retailer — in Canada when I was a kid we had some really crappy discount stores — but just somehow missing the point of their business.

    Epic fail, if ever there was such.

  4. Graham says:

    Target’s entry to Canada was expected to upend Canadian retail.

    I don’t know if Walmart Canada even took notice of it. Their stores around here didn’t change much. They were already years into their big move, into grocery, and they had their own strategy to pursue. For all I know, their board meetings laughed off the Target “threat”. Probably not. Those guys come across as smart. But in the event, they might as well have had a big corporate beer blast in lieu of a strategy to fend off Target.

    Other retailers, already competing with Walmart on their own turf, went big on new construction or remodeling to face off against Target. Loblaw, a grocer that some years earlier had entered the discount retail and retail drug trades to face Walmart, and Shoppers Drug, a pharmacy and related-goods and cosmetics seller, were among those companies reputed to be ready to throw down with Target. Or in some cases, to do so as part of new mergers or alliances.

    They all apparently needn’t have bothered. But all probably set themselves up to compete pretty aggressively against one another over the next decade.

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