Target Giving Up on Canada
This news is a few days old now, but I find it fascinating enough that I'm gonna go ahead and feature it here on MattChat.
According to one of their logos, Target stores love Canada:
Ummmmm..... not so much anymore.
The romance is over.
Divorce is on the horizon.
"The Minnesota-based retailer announced on Thursday that it plans to discontinue operating its 133 Canadian stores to stem financial losses that went as high as $1 billion a year.
Target said that it expects about $5.4 billion in fourth-quarter losses from discontinued operations in Canada. It foresees about $275 million of losses on discontinued operations in fiscal 2015."
So..... what happened?
"Target invaded the Canadian retail market with a massive store fleet, even when it did not have a sound supply chain to back its needs. Canadian shoppers weren’t satisfied with their experience at Target due to high prices, out of stock products and a poor selection of merchandise. According to a survey conducted by Forum Research last year, only 27% of the customers polled were “very satisfied” with their experience at Target. Others felt that the products were too expensive and the retailer was unable to meet customer demand, as a lot of products were out of stock. Products that were in-stock weren’t inline with the customer preferences. As a result, the company had to usher heavy markdowns to clear its store inventory that routed its gross margins."
Yup, I'm no retailing whiz, but that type of stuff will doom a business.
Plus, for the Target stores located near the border where there was an option for customers to drive into the U.S. and buy their stuff cheaper, that was just added doom.
The worst part of this story:
"Around 17,600 employees are expected to lose their jobs."
Ugh!
Target here in the States is still suffering from that credit card breach that took place during the holiday shopping season back in 2013.
There's no immediate worry about U.S. Target stores closing. But, they better stay alert and vigilant.
Target grew too big, too fast in Canada and lost a gazoodle of dough because of it.
Folks, do what you do well but know when you're doing enough.
Out for now.......
Matt
