#201 Target, eh?

In 2011, US retail giant Target decided to enter the Canadian market. It seemed like a logical move because of the geographic and cultural proximity, and the fact that Canadians frequently drove across the border to shop in Target’s stores in the US. Ultimately however, Target’s rapid move into Canada was one of the most expensive failed international expansions in modern retail history. After acquiring more than 200 Zellers leases, the company attempted an aggressive rollout by opening 133 stores in a single year. The company was clearly stretching its supply-chain, real-estate, and merchandising capabilities to a breaking point. Fundamental operational issues surfaced immediately: inaccurate inventory data, misconfigured replenishment systems, and poorly trained logistics staff led to the now-infamous image of store shelves that were both empty and overstocked at the same time. Canadian consumers, expecting the same “cheap chic” assortment and pricing as in the U.S., instead found higher prices, weaker selection, and unfamiliar house brands. Because the launch had been preceded by heavy media coverage and high expectations, disappointment spread quickly and brand trust collapsed before the company even had a chance to correct course. Only two years into operation, Target admitted that profitability was years away and opted for a complete retreat in 2015, writing off billions of dollars. It didn’t sink the company, but the case remains a cautionary tale about overestimating brand carryover, underestimating operational complexity, and expanding abroad without deep local testing or disciplined sequencing – even when moving into a market that is as close as Canada is to the US.

Thanks! You've already liked this
No comments