Canada: New retail era to emerge from Target’s leftovers
Target’s abrupt decision on Thursday to quit Canada after less than two years will bring short-term pain for rivals as the chain prepares to liquidate inventory at its 133 stores – a boon for consumers that increases pressure on competitors.
In the longer run, retail heavyweights such as Wal-Mart Canada Corp., Loblaw Cos. Ltd., Canadian Tire Corp. and Costco Canada stand to shore up their leading positions. They will likely try to acquire some of Target’s leases.
But underperforming players, already pushed to the brink by e-commerce, the expansion of U.S. powerhouse Amazon.com and a tight market, will need to find new ways to grab business.
In these challenging times, merchants “have to fight and scratch and work hard to both satisfy customers and make a reasonable return,” said Humphrey Kadaner, president of Mastermind Toys, a chain of 36 stores.
Target’s exit is a win for incumbents, among them Canadian Tire and Loblaw, which worked hard to raise their game in preparation for the U.S. chain’s arrival in 2013.
But the heavily competitive retail environment shows few signs of easing as contenders clamour for a slice of the roughly $2-billion of annual sales that Target is leaving behind.
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