From Marketingmag.ca

In 2011, Target, a US based supermarket chain, began their Canadian expansion when they purchased lease rights from over 200 Zellers locations.^[1] Unfortunately for Target, Walmart, one of their direct competitors, made their Canadian expansion in 1994 and had already developed a strong brand relationship with many Canadians.^[2]

Both Target and Walmart employ a cost leadership strategy, and average prices from both chains are traditionally very low. However, a recent article in the National Post explains that Target has recently cut prices in their Canadian stores in order to challenge Walmart and win additional market share. The article shows that a sample of the exact same goods bought at the two different stores cost 4% less at Target.

This case is interesting because Target Canada is not just competing with Walmart, but also its father company Target USA. Most Canadians live close to the US border, and many routinely travel south of it in order to take advantage of lower prices. When Target opened its first Canadian stores in 2013, many consumers were upset to find that the prices offered in these new stores were significantly higher than those in the USA. By reducing their prices, Target has directly engaged Walmart in a price war, as well as offered Canadians increased incentive to shop in Canada.