Target Canada gets failing grade for customer satisfaction

Target may have entered Canada with a bang, but its impact on consumers so far appears to be a bust.

A new survey says Target scored the lowest among a group of department stores when it comes to customer satisfaction, while Costco ranked at the top of the list.

The Forum Research poll conducted last week shows 62 per cent of Costco customers were “very satisfied” with the service and selection at its stores, compared with just 27 per cent at Target.

The findings suggest Target doesn’t appear to be living up to its hype, says Forum Research president Lorne Bozinoff.

“Satisfaction ratings are actually declining in Ontario where they've been in the market the longest,” he says.

Target entered Canada in March with plans to open more than 120 stores by the end of the year. The move has forced Canada's incumbent retailers to rethink their business models, alongside increasing competition from existing U.S. retailers such as Wal-Mart and Costco. It's also said to be helping drive the current wave of consolidation in the retail industry, including Loblaw's bid for Shoppers Drug Mart and the purchase of Safeway's Canadian assets by Sobey's.

Target's problem so far is that it isn’t offering the same discount prices that drove Canadians to its stores in the U.S. The Canadian stores are also having problems stocking their shelves, Bozinoff says.

Target ranked behind Wal-Mart in the survey, where 40 per cent of customers were “very satisfied,” as well as storied Canadian retailers such as Hudson’s Bay (40 per cent) and Sears (34 per cent).

"Considering that nearly everyone who shops at Costco is satisfied with the store, they are the natural leaders,” says Bozinoff. “It is interesting to see Target dropping the ball on customer satisfaction after the big entrance they made into the market."

The survey was done on August 14, based on an interactive voice response telephone survey of 1,578 randomly selected Canadians 18 years of age and older.