Yahoo Finance Target inching tentatively back into Canada with cross-border online shopping — at a price
Are you ready to give Target another chance?
The U.S. discount department store chain’s huge expansion into Canada turned into perhaps the biggest retail debacle in this country’s history. But now Target is sticking its toe back into the Canadian market. But only via online.
The Minnesota-based corporation has an international sales site offering goods in Canadian dollars, The Canadian Press reports.
The site is operated by Borderfree, a Canadian company that’s a unit of Pitney Bowes, the familiar postage-metre outfit that has moved into e-commerce. Borderfree operates its own online shopping mall with dozens of name brand retailers but its Target effort is separate from that.
Target spokeswoman Jamie Bastian has provided no details to news media about the new Canadian effort.
“I can confirm that the website you are seeing is part of a test,” she told Yahoo Canada via email. “At this time we do not have additional information to share, we will have more details in the near future.”
It’s been less than a year since Target’s ignominious retreat from Canada.
Its Canadian subsidiary filed for creditor protection last January, then closed all 133 of its stores (which began rolling out two years earlier) over a period of five months and liquidating its remaining inventory at not-exactly-fire-sale prices.
Some 17,600 people were put out work, many of them employees who’d previously worked for Zellers, the discount chain whose defunct locations became homes for the short-lived Target stores.
Target came into Canada with high expectations, perhaps too high, based on the experiences of cross-border shoppers who loved the U.S. stores with their selection of designer goods at cut-rate prices.
Many Canadians expected the new outlets to offer the same goods at roughly the same prices, especially since the loonie was at par with the U.S. greenback back then.
Read more:
Target closes all 133 stores in Canada, gets creditor protection
Target Canada's closing sale just as underwhelming as its opening
It wasn’t the case on either count. Selection was not as good and prices were higher. Target also found itself being underpriced by other retailers such as Walmart.
Supply problems left Target shelves empty in Canada
To make things worse, Target botched the setup of its supply and distribution network in Canada, leading to chronic shortages of products and empty store shelves. Hardly the faux chic “Tar-jay,” experience devotees enjoyed at the American stores.
The Canadian operation bled cash constantly and Target took a US$5.4-billion writedown on the venture.
Bastian would not discuss details on products and pricing for the new online channel but there might be at least some cause for hope.
Superficial comparison of the Canadian and U.S. online sites suggests they will be offering the same array of goods.
However, the news may not be quite as good when it comes to prices.
Item cost, shipping rates leaving Canadians blue
We compared three products on both sites and found Canadian prices were slightly higher, even allowing for the now-deflated Canadian dollar, not including shipping, duties and taxes.
For example, a Super Pack of Huggies Snug and Dry Diapers costs USD$24.99 on Target’s American site but CAD$34.36 on the Canadian site. The Bank of Canada’s currency exchange tool says that converts to USD$26.25.
A Disney Frozen Elsa My Size doll is priced at USD$59.99 on the U.S. site, compared with CAD$82.49 (USD$63.03) on the Canadian site. An HP x360 11-p12NR laptop computer goes for USD$299.99 on Target’s U.S. site but CAD$412.53 (USD$315) on its Canadian counterpart.
The situation gets more dire when shipping is factored in. This Star Wars VII 20" Captain Phasma figure ($19.99 on the U.S. site, CAD$27.49 or USD$20.86) more than doubled in price when shipping and duties were added in.
Canadians on the Red Flag Deals forum shared their concerns about shipping prices, too, and said that with prices this high, they're not interested in giving their business to Target. Especially after their still-recent speedy exit.
