For years, Canadians headed to the border to shop at Target, knowing that there would be deals and merchandise available they couldn't find here. Now Target has come north, taking over 220 Zellers' stores and marking the giant discount chain's first international expansion. But exactly what will be on its shelves, and why, remains surrounded in confusion.
The uncertainty stems from an announcement made last week by Heritage Minister James Moore that Target had been granted approval to sell cultural products in its Canadian stores. In March, his ministry launched a review of Target's entrance into Canada, to determine if it would be a "net benefit" to the country. On the basis of the $3.5-billion it promises to invest here and its willingness to meet a number of conditions the green light was given.
According to Moore's official statement, Target committed to:
- Creating between 20,000 and 25,000 jobs in Canada by 2015;
- Supporting Canadian cultural events and organizations; and
- Promoting uniquely Canadian cultural products.
Much of the confusion stems from what happened next. Media outlets across the country saw the approval, read the conditions and reported that Target would be allowed to take over Zellers' stores, providing it featured those uniquely Canadian products. Left unsaid for the moment was what uniquely Canadian mean — maple syrup, poutine, back bacon — and what percentage of the stores would be devoted to them. Also left unanswered was why Target needed to adhere to this, but not Walmart, its biggest rival in the discount retail space.
In terms of specifics, Target Canada spokeswoman Lisa Gibson would say only that "We will be sharing details around our merchandising strategy at a later date. We have had ongoing conversations with our suppliers, including domestic suppliers, for some time now," according to the Vancouver Sun.
Pundits and analysts immediately leapt into the fray, arguing over the appropriateness of mandating companies sell a certain selection of products. Others speculated that 'uniquely Canadian' meant things like Margaret Atwood books and Bryan Adams' CDs, which perhaps wasn't so onerous after all. Indeed, Liberal heritage critic Scott Simms said Moore's decision was the right one, providing it was fully enforced and Target adhered to its commitments.
Just when it appeared the whole matter might fade away, a sudden curve ball emerged. Financial Post editor Terence Corcoran insisted that Target wasn't agreeing to sell Canadian cultural products, it was asking to sell them.
It turns out that Target's purchase of Zellers' real estate, but not business per se, meant it was moving into the cultural distribution realm. Foreign companies are not allowed to distribute Canadian culture, not without a joint venture with a Canadian company.
Hence, Target needed an exemption from the rules if it was going to stock Nickelback or Tragically Hip on its shelves. At least, that's Corcoran's interpretation of the deal. (Oddly, the site he edits is still featuring Financial Post reports of the announcement that Corcoran explicitly says are inaccurate.)
So what does this all mean for Canadian shoppers looking forward to the first Target stores opening here next April? And what does it mean for other U.S. or international retailers looking to set up shop in Canada?
Nobody has a clue.
The only thing that's clear is that Target is definitely on its way, and that you may be able to find some Celine Dion CDs at a pretty good price. That's reason enough to celebrate.