George Brown College

COMM1003: English Skills

Cause and Effect Essay
The reasons for the failure of Target in Canada

Submitted By
Bike Jiang(100920232)
On
February 19, 2015

“Expect More. Pay Less” is the promise from Target to their guests. Less than two years ago, Target came to Canada with their ambitious and opened the first retail store in Canada. During last two years Target had opened 133 stores in Canada. However, last month Target Canada announced they would close all of their retail stores in next few months. Target’s complete failure in Canada is caused by their inefficient marketing strategies(4P’s) especially in price and product. Price is the primary matter to the consumers. A chief equities strategist from Belus Capital Advisors writes “Canadians along the border find it a better overall value proposition visiting Target stores in the U.S. or buying online”(Brian Sozzi). Canadian consumers complained about that Target’s price are lower in U.S.. Therefore they would like to visit U.S. Target stores or buy online rather than buying in Canadian Target stores. Target offers a wide selection, however there are some facts that cannot be ignored regarding prices. For example, the cost of shipping goods across Canada is significantly higher in U.S.. Most of Target’s goods to U.S. arrive via west coast ports. Those goods can be distributed to 248 Target stores in California which has nearly 39 million people living in an area of 164,000 square kilometers(Kennedy,2015). By comparison, the goods arrive in Vancouver only can be delivered to 19 Target stores in B.C., where is only a population of 4.4 million(Kennedy,2015). There are ten times more potential consumers and 200 more Target stores in U.S.. The difference in shipping cost will be passed on to Canadian consumers. Besides the matter of price, product is another key point for a retail store’s success. In an interview with The Journal, a former Target employee complained of having to fill half of an entire aisle with Tide detergent when the store had nothing else to fill shelves(Peterson,2015). Target has opened 133 stores during past two years, the fast expansion of Target leads to the difficulty with inventory planning and product selections by the management. With empty shelves in Target, Canadian consumers cannot even shop what they want. More important, the products that are sold in Target Canada have less choices and worse quality than in U.S. which really disappointed the Canadian shoppers. For example, many of the stylish, exclusive brands Canadians see in Target’s American stores did not come north. “We’ve been down to the States quite a bit and we’ve shopped at Target and we were impressed,” Nicole