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
Stores ready for Boxing Day sales
Chinese company to invest $255M in Antigua port
Reports of burns spur Keurig recalls
US removes Gambia from trade agreement
Ex-Soviet nations team up
Company says where new potash mine will be
Russia facing 'deep recession'
Court orders release of jailed real estate mogul
How the Dow Jones industrial average fared Wednesday
Most actively traded companies on the TSX
MF Global Holdings to pay $1.21B in restitution
Taser and Walgreen are big market movers
Average US 30-year mortgage edges up slightly
US stocks eke out gains in abbreviated trading day
Sony statement on the on-demand release of 'The Interview'
Unions make push to recruit protected immigrants
Sony broadly releases 'The Interview' in reversal of plans
US stocks move higher in abbreviated trading day
No bail for Uber driver accused of sex assault
Grain lower, livestock mostly lower
Grain lower, livestock mostly lower
B2Gold employee killed at Philippine mine
US stocks open higher in abbreviated trading day
Wal-Mart tests gift card exchange
Honda recalls 1,252 Crosstours over side air bags
Loonie edges higher amid lower commodities
Feline fame in cyberspace gives species a boost
Applications for US jobless aid fall to 7-week low
TSX heads higher in short holiday session
HeidelbergCement offloads Hanson unit for $1.4 bln
NKorea outage a case study in online uncertainties
Brookfield hikes offer for homebuilder unit
Economy dominates in-tray of new Tunisia president
Airbag maker Takata execs reshuffle, take pay cut
Russia in offer to help firms with foreign debts
European shares mixed after Dow tops 18,000
Denver shelters cite legal pot in homeless upswing
Sony tries to save face with 'Interview' flip-flop