This is a response to Derek Kwan’s blog post about Target’s expansion into Canada, which can be found here.

In his post, Derek suggests that Target’s expansion to Canada will succeed and that the chain will be a threat to stores like Wal-Mart, Sears, and Old Navy. However, one important thing to note is that Target is the new entrant to a competitive market where the major competitors have already established a very strong foundation. Target, on the other hand, might experience many issues through their expansion.

Target will be opening 125 locations spread throughout Canada.

Supply chains might be more difficult to handle due to the added barriers of transportation, taxes, and tariffs. Average Canadian Target store sizes are also only 30% of the size of their American counterparts.  Furthermore, moving to Canada will mean that Target must adapt to different consumer behaviour and responses. Whatever strategies served them well in the United States might not work as well in a different country.

If Target’s Canadian venture does fail, it wouldn’t be the first company to cross the 49th parallel only to be forced to withdraw within a few years. Canadian restaurant chain Tim Hortons experienced just this with their attempts to expand into Boston, Massachusetts. The franchise closed down thirty-six New England locations that it had opened after losing $4.4 million in one year.

As you can see from the advertisement above, Target loves Canada. The only question now is: will Canada love Target back?

Picture Sources: O Canada | Ontario Move