Discount superchain Target Corp. is considering opening stores in Canada but shoppers shouldn’t get too excited about the famed red bull’s-eye brand heading north quite yet.
A spokeswoman for the company said it is too early to determine whether Target will actually make Canada its market of choice for international expansion, and that at this point it’s only exploring the possibility.
"We haven’t confirmed that it will be Canada," said Hadley Barrows. "We’re looking at Canada, Mexico and Latin America as options."
In other words, don’t count on Target heading across the border any time soon. Barrows said it could take three to five years before a firm decision is made.
Some Canadian shoppers might be feeling a sense of deja vu as Target continues to waffle over whether it wants to cross the border. Nearly 20 years ago, the company was part of a rush of American superstores who considered moving across the border and possibly buying up the operations of Woolco. Walmart won that bid, and Target scrapped its owns expansion plans.
Then, in 2004, Target was rumoured to be in talks with Hudson’s Bay Co. to buy its Zellers stores, which would’ve launched an aggressive rollout across the country. Nothing ever came of it.
Other U.S. companies have found huge success here with their own expansions. Hardware giant Loews has held its own against both Rona Inc. and Home Depot, while Bath & Body Works found its niche beside the Body Shop and Lush.
However, many U.S. retailers find the lack of attractive retail space a deterrent, suggested Wendy Evans, head of retail consultancy Evans and Co. Consultants Inc.
U.S. retailers are "very discerning about locations," she said.
Without prime locations in major malls across the country, or big box supercentres, some retailers fear there would be too much risk.
Evans believes the economic downturn has changed the environment somewhat, and created a lot of "location opportunities that would not have been there a few years ago."
Landlords have been willing to negotiate lower lease rates for storefronts that have been left empty for months or longer, she said.
Retail analyst John Winter of John Winter and Associates said Target and other U.S. retailers need to take notice of a major opportunity they’re missing in Canada.
Toronto’s metropolitan area has one of the largest populations in North America, akin to Detroit, he said. "And we have a very high income compared to the Detroit."
Calgary, Montreal, and Vancouver are also logical markets.
In Canada, "there is a gap between Walmart, Sears and the Bay. I think Target would fill that very nicely," he said.
For now, Target isn’t jumping at the chance. Last week, the company announced plans to dramatically rein in its U.S. expansion plans and focus on spending $1 billion to renovate 340 existing stores this year.
It’s also looking at opening urban format stores, which are smaller locations centred within big American cities. Canadian supermarket chain Sobeys rolled out a similar plan a few years ago.
"At this point our main focus is continuing to grow within the United States," Barrows said.
"I’m certain the expansion is going to happen. We just don’t know any other specifics."
