Winnipeg Free Press - PRINT EDITION
Posted: 05/7/2013 1:00 AM | Comments: 0
TORONTO -- Target Canada president Tony Fisher addressed the sticker shock gripping some consumers who expected the retailer's prices would be on par with its U.S. stores when it opened its first Canadian outlets in Ontario last month.
The hot-button issue of Canada-versus-U.S. retail pricing was the subject of a Senate committee report this year and resurfaced in last month's federal budget when the government announced it would drop tariffs on hockey gear and baby clothing.
Fisher told a Canadian Club of Toronto luncheon Target knew it would have to be competitive with other retailers operating in the Canadian market, whether they be U.S.- or Canadian-owned. "We built this business model to be successful in Canada," he said, which involved a detailed business analysis of what it takes to compete in the local marketplace alongside other large retailers -- most notably, key U.S. rival Walmart.
"There has been a lot of widely publicized discussion around why the retail prices are not on parity," Fisher said.
Last year, a BMO study estimated Canadian retail prices are roughly 14 per cent higher than in the U.S.
"Transportation costs are higher, distribution costs are higher, fuel costs are higher, wage rates vary across the country, the tax rates are different, cost of goods are different, the duties -- I think the scale we have here in Canada is quite different from the incredibly different, densely populated U.S. marketplace," he said.
Fisher reiterated a promise of offering "highly competitive" prices here and said he is not deterred by the notion of consumers who still want to cross the border to shop at Target in the U.S.
"I still work for Target," he said. "We are not trying to compete with ourselves -- we want to come in and compete with the retail landscape here."
Despite some consumer gripes in social media, the company's out-of-the-gate success in its initial three "soft openings" in Ontario saw Target swamped with overly high demand. It "was a good problem to have," Fisher said, adding it was hard to keep inventory on the shelves given the high sales volume. "We knew from the beginning we were not going to be perfect immediately."
Fisher said moving from Minnesota last year to a Toronto suburb as a consumer who needed to furnish his house and buy his kids sporting goods provided him with a good education about the retail scene in Canada.
"There just isn't the same breadth of options from a one-stop shopping experience," compared with the U.S., he said. "I'd find myself going to a lot of different retailers, and it helped me learn the competitive landscape, but it also helped me learn about where we could fit in to this marketplace."
-- Financial Post
Republished from the Winnipeg Free Press print edition May 7, 2013 B4
Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.
Having problems with the form?Contact Us Directly
High hopes for low-cost grocers
Microsoft wants US suppliers to give employees paid time off
BBC shifts controversial host out of Top Gear
Government criticizes NDP for T-shirts
Competition Bureau OKs Postmedia/Sun deal
FACT CHECK: Myths in the political roar over Common Core
Bankruptcy hearing could decide fate of RadioShack
Ricki's, Bootlegger, Cleo in court protection
Heinz, Kraft to merge
CBC News cutting 144 jobs, Radio-Canada cuts 100
Unprecedented sage grouse protection deal signed in Nevada
Obama praises payday lender rules, vows veto of limitations
200 hens poached from California farm weeks before Easter
Spotify's Top 10 most viral tracks
Authorities go after crooked car deals in national crackdown
Diet sodas fall in US; Pepsi takes back No. 2 spot
Nova Scotia to gain $7.7 million in fee hike
Child fatally struck by public transit bus in Rhode Island
Worker struck by new roller coaster during testing at park
Regulator proposes new TV service code
Norwegian Air orders 2 crew in plane cockpits during flights
US stocks recover early losses, oil gains on Yemen tensions
Quebec premier makes appeal to Cirque founder
US stocks extend losses to a fourth day, oil price gains
Italy uncovers European tax-avoiding fuel scam
Lawmakers unhappy with new fracking rules
Jersey shore pier where coaster fell into sea to be rebuilt
Pressure rises on Greece as savers drain bank deposits
TD chief: bank must adapt to lower growth
Gulf equities slide as Saudi launches airstrikes on Yemen
FINRA fines Oppenheimer $3.75M in employee fraud case
TD chief: bank must adapt to lower growth
Fred's reports 4Q loss, adjusted earnings match expectations
Steelers stadium keeps Heinz Field name despite Kraft merger
FDA to scrutinize unproven alternative remedies
'American Idol'-like talent competition app launches
PepsiCo CEO Indra Nooyi received $19.1M pay package in 2014
Loblaw's Joe Fresh expanding shoe business
How gov't aims to protect low-income users of 'payday' loans
Women pictured on Penn St. frat's Facebook page talk to cops